Suing Napster - RIAA's Great Mistake

I bought a CD burner in the spring of 1998, back in the days when SCSI still ruled the market, most drives took 37 minutes to burn a disc (2X), and the lowest possible price for a decent blank CD was $2.

Most “mix CDs” were made from ripping individual tracks from friends’ CDs. If I needed a song that I couldn’t find in anyone’s CD collections, I would go on AOL with my 33.6 modem and search the chat rooms with automated “server bots” and painfully download a 3-minute song for a half hour.

In early 1999, my AOL account was given a proper wake, and I got a cable modem. My MP3 collection exploded into the hundreds when I learned how to use “ratio” FTP sites throughout the year. Dealing with these sites was painfully annoying, but they were the best source for illegally copied MP3s. Soon these sites started commercializing the same way that “warez” web sites had years beforehand – by tricking visitors into clicking ads or signing up for porn mailing lists, so the site’s operator could get advertising money. These “banner” FTP sites quickly degraded MP3 trading into futility.

Then my friend Charlie sent me an installer file over ICQ named “napv2b2.exe” and told me that I absolutely must install it. The file sat in the download folder for a week or two, then I finally installed this program called Napster. It was buggy software that required me to register a username and create a profile, which I despise. There was also a banner ad sitting below the main button bar – strike two.

After getting past these annoyances, I started using this program. There weren’t many users, and the selection wasn’t that great. But instantly I saw the promise of this – there were no ratios, no haggling, no upload credits, and no sleazy websites with porn banners and popup windows everywhere. You’d just give what you had and take what you wanted. Unfortunately, the servers were down often, and there were many bugs to work out in the software. Soon I stopped using Napster because the problems were too severe.

A couple versions later, I decided to give it another try. The banner ad was gone, the servers were almost always up, and the software was much more stable with better features. At this point, I was inseparable from my computer with Napster, a cable modem, and a CD burner. My MP3 collection grew past 500 songs, and I started using the Hot Lists and discovering a lot of new bands, or just finding more songs from bands who I had previously considered “one hit wonders.”

From that time in late 1999 to present day in summer 2001, my MP3 collection has grown from 500 to over 2200 songs, and Napster was largely responsible. Of course, Napster was sued out of existence by the RIAA and should have given up months ago, because the service is completely worthless now. (I have more songs on my hard drive than Napster has listed at any given time now.)

The lawsuit, which most Napster users knew was inevitable, was obviously about contributory copyright infringement. The service wouldn’t last, especially since it IPO’d and went commercial somehow (despite the removal of the banner ads, which was its only obvious source of income). Blame venture capitalists.

The record companies accused Napster of irreparably harming CD sales. My collection contains hundreds of artists, but this is the key point that most record companies don’t understand:

A pirated MP3 does not equal a lost CD sale.

I have songs from over 300 artists. Assuming each artist has only one CD that I’d buy, and each CD costs the RIAA’s bend-over-a-bit-more price of $16, that’s $4800 in “lost sales” from me. But I would not have bought all 300 CDs! I only have a few songs from many artists, and if I didn’t get them for free, I wouldn’t have acquired them at all. I don’t think I’ve even made $4800 in my life.

Between the time I bought my CD burner and the time Napster started really picking up, I didn’t buy a single CD. (Except the blanks – I bought them in 50-packs.) But as my collection started to really expand with Napster, I discovered many new bands and expanded my collections from others.

In the last year, I’ve bought more CDs than I did in the previous three years (ironically, Metallica’s S&M is among them), and I’ve bought more concert tickets than the previous 19 years. I’m more likely to give new bands a chance, since I can pirate some of their songs and see if I really like them before buying the CD. And I’m much more likely to go to concerts when bands come to town, because now I know 300 bands pretty well instead of about 40. Even if a no-name band is on a venue’s schedule, I download some of their songs to see if their concert is worth attending.

Napster expanded my musical taste and has greatly INCREASED the number of CDs and concert tickets I’ve bought in the last year. And I’m not the only one – by suing Napster, the RIAA gave it tons of free publicity, and its user base grew faster than any other internet application in history (including email, WWW browsers, IRC, instant messaging, online shopping, stock trading, etc.).

Now, with Napster in a permanent coma from which it cannot recover, the RIAA has just given up all hope for a fee-based service by forcing the file sharing community to split between more than five other large free services, each having some sort of condition making it more difficult or impossible to shut down.

Between now and the time it takes to get a service that I like to use as much as Napster, I won’t be discovering new bands. None of the alternative services are quite as good, so they don’t have the same effect of lots of people finding new music. Therefore, by suing and effectively killing Napster, the record companies are losing sales and limiting the possible growth of small bands.