BYLINE: By Steven Levy;
With Brad Stone in Silicon Valley, N'Gai Croal, Jennifer Tanaka and Arian
Campo-Flores in New York, Jamie Reno in San Diego, Andrew Murr in Los Angeles
and Pat Wingert in Washington, D.C.
BODY: Meet the Napster Generation. Rachel is 14, an eight grader in Potomac,
Md., who loves lacrosse, basketball and guitar. Listens to 'N Sync. Like
millions of her peers with a computer and a clue, she's been using a program
called Napster to download free music from the Internet, "because teenagers
don't have that much money," she says. She doesn't think it's wrong to use
Napster. "People don't think it's anything bad," she says. "Or think about it at
all." Smitha, a high-school student in Falls Church, Va., credits Napster, which
gives her almost unlimited musical choices with a mouseclick, for expanding her
musical horizons and "definitely" changing her buying habits. "I haven't
purchased a CD in quite some time," she says.
Nor has
Alejandro, a student at Stuyvesant High School in New York City, who downloads
music while he sleeps. "Napster's the best thing ever created," he says. "I
don't have to spend any money." Daniel, a Stanford comp-sci major, agrees: "I
think almost all college students use it right now." The ethics issues of
Napster don't bug him. "The main thing," he says, "is convenience."
Steve Bass does feel guilty about using the software. But
then, he's 50, way past the age of senior citizenship in the Napster Generation.
A Pasadena, Calif., writer and musician, he gets jazz tunes from Napster.
"Morally, I've gotta stop," he says. "I've got a real conflict."
But conflict is what Napster, a deceptively simple
computer program that's turned the Internet upside down, is all about. Conflicts
between listeners and record labels, labels and dot-coms, even artists against
their audiences. According to one's point of view, Napster is a terrific way to
acquire digital files that play tunes or a satanic jukebox that enables piracy
on a scale not seen since Jean Lafitte cruised the seas. And sure enough, the
popularity of Napster, the fastest-growing program in the highly incendiary
history of the Internet, is tied to getting something for nothing. Napster
allows you to search for almost any song you can think of, finds the song on a
fellow enthusiast's hard drive and then permits you to get the song for
yourself, right now. For the unbeatable cost of free, nada, gratis, bupkes,
zero.
That's right. When you use Napster you simply
download the program into your computer, make up a weird name for yourself and
look for whatever song you want. Obscure Dylan tunes. "These Boots Are Made for
Walkin'." "American Pie," by Madonna or Don McLean. Within seconds you'll
probably see a number of other users who have the song in the MP3 digital
format. One click of the mouse and your computer hooks up with the one you
choose, sucking up the bits that will allow you to play back the song on your
computer, on a Walkman-like MP3 player or even on a CD that you might "burn"
yourself. Fee to you: nothing. Royalties to artist, record company, songwriter:
nothing. Guilt: optional.
The record companies are
apoplectic. "The people who are on the board of directors and in the upper-level
management of Napster all belong in prison," says Howie Klein, the president of
Reprise Records. The Napster people, however, are not in prison: they're Silicon
Valley heroes who have gotten $15 million in venture-capital funds. The downside
is that they have no business model and are targets of several lawsuits charging
them with copyright infringement and racketeering, including one by chest-baring
heavy-metal rockers Metallica.
But that hardly matters.
The fight over Napster has taken on a larger dimension, involving the future of
music publishing, copyright law, 21st-century ethics and the relationship of
artists to their audience. Pamela Samuelson, codirector of the Berkeley Center
for Law and Technology, fears a "civil war" between artists, technology
companies and desperate "copyright holders who want to control it all." For a
few years now, the emergence of friction-free Internet pathways has raised a
raft of questions about the future of entertainment and media, with no shortage
of Chicken Little cyberpundits predicting an intellectual-property
apocalypse#151;for music and everything else. But it took Napster to actually
bring down the sky. And though there's hope that things will ultimately work
out, right now no one is quite sure how to pick up the pieces.
Sitting at the center of all this controversy is Napster's creator: a
slouchy, bullet-headed 19-year-old college dropout who suddenly finds himself
the hottest star in the world's hottest industry. One evening last week Shawn
Fanning steps out on the roof of his company's building in San Mateo#151;a drab,
five-floor structure with a drive-through ATM and a red Union Bank sign on the
facade#151;and squints at the sun while being interviewed by NEWSWEEK and
photographed by Rolling Stone. At that very moment, a 30-minute MTV special on
Napster is being shown to all of America, but he decides not to watch. "The
media attention doesn't seem real," he says. As the photographer shoots,
college-age Napster employees toss bean bags at him. It's just another night in
Silicon Valley.
Only a year ago, Fanning was an obscure
freshman at Northeastern University in Boston. After surviving a difficult
childhood#151;his family was on welfare during his early years, and at one point
he and his siblings were briefly shipped out to a foster home#151;he was a
determined kid, according to his uncle John Fanning. The uncle had suffered a
similarly rocky beginning and took an interest in his nephew, letting him work
at his computer-game company near Cape Cod and purchasing a PC for him.
According to Uncle John, Shawn applied to only two schools because he didn't
have the $40 application fee#151;he was too proud to ask his uncle for the
money#151;and one, Carnegie Mellon, turned him down.
Before finishing his freshman year, Shawn was bored and "partied out"
at Northeastern, and spent much of his time on IRC, an Internet chat system. One
IRC friend, Sean Parker, 20, lived in Virginia; another, Jordan Ritter, 23, was
also in Boston. Fanning had noticed that his college roommates were into trading
digital tunes on the MP3 format with each other but had difficulty finding files
they wanted. He suggested the trio create a way for people to search for files
and talk to each other, "to build communities around different types of music."
File-sharing was almost an afterthought.
While writing
the program#151;dubbed after his childhood nickname, from hairier
days#151;Fanning spent "all waking moments on software." At first, he says, "we
were just thinking of this as a cool project"#151;but they needed money for
equipment and high-speed connections. Parker and Fanning's uncle convinced him
it should be a business. The program went up in September 1999, and people
instantly took to it, quickly creating a critical mass of tunes. As the audience
grew#151;"we were doubling in users every five to six weeks," says John
Fanning#151;the company found an angel investor, an interim CEO and a new home
in Silicon Valley.
Fanning's program came at a pivotal
moment. Ever since the VCR, the march of technology has created controversy over
the way people make copies of artistic works. Film and TV studios hated the
device, and tried to litigate it out of existence#151;an effort that ended with
a Supreme Court ruling that consumers were allowed to copy television shows for
personal use. (Now, of course, those same studios make the bulk of their profits
from the device they tried to kill.) The use of the audiocassette was viewed
with similar panic. But piracy from those media was limited by the difficulty of
making multiple copies. The Internet changed that#151;it allows fast, unlimited
file distribution, especially with high-speed connections. Still, anyone who
tried to use the Net to sell illegal digital copies of songs or films was
clearly breaking the law.
But because Napster simply
allowed users to share their personal files with each other, Fanning and this
new company claimed they were kosher. It's the digital equivalent of the piano
player in the brothel: hey, we don't know what goes on up-stairs. But that
excuse went only so far, especially as the record companies began to notice that
the Napster Generation had commenced swapping files en masse. Whereas most
start-ups get changed by the arrival of the suits, Napster had to face the
arrival of the lawsuits.
First came a filing from the
Recording Industry Association of America (RIAA) for copyright infringement.
Then the heavy-metal Metallica crew found their music downloaded on Napster and
were furious#151;they had their lawyer file another suit. For good measure they
sued some of the universities whose students used Napster, including Yale and
the University of Southern California. Further, the band took the drastic step
of collecting the handles of 300,000 users who had allegedly downloaded
Metallica songs, demanding they be removed from the system. Drummer Lars Ulrich
personally delivered the names. Another suit was filed, by rapper Dr. Dre. (All
are currently pending.)
Meanwhile, Napster's popularity
kept increasing. At one point the program became so widespread that some
colleges banned it#151;users were gobbling up more than half the computer
resources of some schools, just swapping tunes on Napster. Log on at a given
moment, and you could find about a million songs available for instant
downloading.
And now Fanning is sort of a rock star
himself, albeit of the Silicon Valley variety. Instead of a villa in the south
of France, he lives with Parker in a dormlike apartment a couple of blocks from
the office. Two other Napster employees sleep on the floor every night. Fanning
spends what little time he has outside work lifting weights at 24 Hour Fitness,
every night between 11 and 2. He doesn't go out much. "San Francisco would be OK
if I had a fake ID," he says. Fanning and his partners did make a trip to
Berkeley last week to see the Smashing Pumpkinsand ran into lead singer Billy
Corgan backstage. They talked for an hour. "He was a huge supporter#151;he
totally understands how it evolves," Fanning gushed to a friend.
Indeed, how Napster evolves is the big question for Fanning and
partners. That's why the recent $15 million investment by the big-shot Silicon
Valley venture-capitalist firm Hummer Winblad was so important. Other firms,
nervous about the lawsuits, had demurred, a startling occurrence in an
atmosphere where a few million bucks of VC money can be obtained by some nerd's
vigorous sneeze. Hummer Winblad installed one of its VC's, Hank Barry#151;a
former copyright lawyer#151;as the new CEO. "We're trying to build a bridge to
everybody involved in Napster," he says. "From music educators and users to
record companies." Especially the latter. Barry's already been active in trying
to reach a truce with the music industry, calling RIAA president Hilary Rosen
and even Metallica. "He asked for a dialogue," says Ulrich. "It's a weird
situation, though, because we're in the middle of putting him out of
business."
Many observers think that Napster's outlaw
rep has permanently tainted the company. Some of the preliminary rulings have
gone against it, more than 120 universities have banned it for legal reasons
(including those sued by Metallica, which dropped them from the suit) and more
bad news have come with a recent survey. Napster supporters had insisted that
its users might actually buy more CDs after risk-free sampling of downloaded
tunes. But a recent study, using the definitive SoundScan
music-sales-measurement system, concluded that while overall CD sales have been
significantly up, purchases have tanked at stores near college
campuses#151;Napster country.
The "civil war" Samuelson
referred to may have already begun. Not only the business people are taking
sides, but the artists themselves. Napsterites like Limp Bizkit's frontman Fred
Durst, whose free summer tour will be funded by the start-up, are excoriated by
industry types. "Is [Durst] saying only kids with computers should get [his
music] for free?" jokes Val Azzoli, co-CEO of the Atlantic Group. "He should
give his music away for free at every retail store in America! The schmuck!"
While so far only Metallica and Dr. Dre have taken the
step of moving against their fans, their lawyer Howard King says that at least
five other artists have contacted him. Meanwhile, Ron Stone, manager of artists
like Tracy Chapman and Bonnie Raitt, insists that the entire Napster movement is
little better than thuggery. "Basically they're saying our art is worthless,
it's free for the taking," he says. "Music used to be a collectible, now it's a
disposable." With a few other artists and managers, he's starting an ad-hoc
committee called Artists Against Piracy. Somehow it doesn't have the ring of
Save the Rain Forest.
But even if the music industry
succeeds in killing Napster, it is faced with a series of imitators, some of
whom are even scarier from an industry point of view. In a way, Napster is a fat
target for attackers: it uses a centralized database, which allows the company
some control over its users. (And keeps a list of transfers handy for potential
litigants.) But with some newer systems, the searching is done in a distributed
manner that can't be shut down or modulated. One of these systems is Gnutella
(pronounced New-tella). Unlike Napster, Gnutella could be used to exchange not
just music files but any files, including movies, text and photos#151;a
copyright holder's nightmare.
Amazingly, the program
was written by Justin Frankel, a well-known programmer at Nullsoft, a company
owned by America Online#151;which is in the process of purchasing Time Warner,
the world's biggest collection of music labels. Within hours after Gnutella was
posted on the Nullsoft site, AOL executives had it withdrawn. But the code
circulated through the Net and now hundreds of programmers are supporting an
active Gnutella community. If Napster is shut down, says Gene Kan, one of these
pro bono developers, "the postapocalyptic pirates are going to be using
Gnutella."
Even more radical is Freenet, created by
23-year-old Ian Clarke, an Irish computer scientist living in London. His
program is not only decentralized but has safeguards to protect the privacy and
identity of users. The actual files to be downloaded will be encrypted and then
randomly distributed among the community of Freenetters, who won't even know
what information is stored on their own disks. (Could be songs, could be kiddie
porn.) File transfers will be untraceable. Clarke's motives are
political#151;his dream is to liberate intellectual property. "My opinion is
that people who rely on copyright probably need to change their business model,"
he says.
Most observers, however, are more sanguine
about the eventual outcome of the Napster Wars. Even the most virulent opponents
of the software can recognize the popularity of Shawn Fanning's creation.
"Despite all their scary characteristics, people love this stuff," says
Samuelson. And just about everybody agrees that eventually the labels should
muzzle the lawyers and view the Web experiments as potential partners. "How many
industries try to kill off their biggest distribution channel on the Internet?"
asks Gnutella developer Kan.
In fact, a number of
Napster spinoffs intend to work within the system, getting licensing deals from
record companies. One of these is Scour.com, whose key investor is superagent
Mike Ovitz, who first heard of the company, founded by UCLA students, by reading
the college paper. Ovitz notes that as a talent representative, his interest is
in helping artists make the most of the new technologies. He thinks that
eventually money will flow to those artists from models other than direct
payments. "I'm looking at radio, sponsored shows, advertising-driven models,
subscriptions," he says.
Rob Glaser, CEO of
streaming-audio leader Real.com, thinks that when the record companies come to
their senses and figure out ways to work with the Internet (expect some efforts
by the year-end), the worst problems will fade. "All the illegal activity ends
when prohibition ends," he says. "When there's a legal way for people to get
what they want, mass bootlegging will recede."
The
expectation is that music will become cheaper, and there will be more of it
around, and it will be easier to find. But before that happens, the wars have to
quiet down. The lawsuits have to be dropped. And the file-swappers have to come
to grips with the fact that free isn't forever.
Meanwhile, the Napster Generation keeps searching for tunes, keeps
downloading them and doesn't bother with concepts like intellectual property. "I
sympathize [with bands, labels and music publishers] in the capitalist sense,
but the technology isn't stoppable," says Rizwan Kassim, a 19-year-old
sophomore at UCLA. Kassim's own experience is instructive. As one of the alleged
violators identified by Metallica, his account was shut down by Napster. But
Kassim simply began a new one under another name, and kept on downloading. He
also stopped listening to the band, in any format, deleting all his Metallica
tracks from CDs he burned using Napster.
In a final
flourish, he took the one legit Metallica CD he owned and auctioned it on eBay.
"I think I got a couple dollars for it," he says.
At
least someone is paying for music in the Age of Napster.
GRAPHIC: GRAPHIC:
(Diagram) How Napster Nabs Tunes (Graphic omitted); GRAPHIC: (Chart) Battle of
the Bands Gets Bloody (Graphic omitted); PHOTO: EASY LISTENING: Rob Bies, 17,
catches some good vibrations at home in Delaware using a computer hooked up to
the Internet; PHOTO: NAPSTER GENERATION: Freshmen Netizens tune in to digital
vibes at Wesleyan University in Connecticut; PHOTO: GET WITH THE PROGRAM:
Nineteen-year-old Napster creator Fanning (left) and Michael Robertson, head of
digital music site MP3.com, helped start the revolution
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