New music software that aims to make finding MP3 files easier may work a little too well. Some insiders say Napster promotes music piracy, while others say it raises security concerns.
But some music execs see it altogether differently.
"I love it," wrote Marc Geiger, who runs ArtistDirect, an online marketing venue for artists like Tom Petty, in an email. Napster is "totally community oriented and a 'pass the music' [play]. It argues totally for the subscription model we have been yapping about."
Although Napster hasn't officially launched, the startup is generating plenty of buzz in the music industry. The company, incorporated last May, recently released the 2.0 beta version of its software, which offers chat features, a music player, and allows users to share their MP3 libraries.
MP3 is an audio format that allows users to compress and send music files easily over the Net. It's the de facto audio standard online, but the majority of MP3 files are pirated, a phenomena that's caused a stir in the music industry. The recording industry is working on an initiative to add security to its music downloads. But that hasn't stopped new businesses and new ideas for how artists can make money from proliferating online.
Fans like Napster because it combines existing elements of the online music experience into a single application that allows people to talk about what music they like and trade files.
"Napster is a microcosm of what's happening on the Net," said John Fanning, one of two Napster founders. The other is his 18-year-old nephew, Shawn Fanning, who wrote the program code.
Dave Goldberg, CEO of Launch Media, said Napster is probably being used to trade a lot of pirated MP3 files.
"Clearly, there's going to be lots of different ways to get pirated music," said Goldberg. "This is just a different way."
Napster CEO Eileen Richardson said that the company is in talks with the Recording Industry Association of America about the software. An RIAA spokeswoman declined to comment on Napster.
"We're committed to working with them," Richardson said. "We're going to follow all the laws to the letter, including the Digital Millennium Copyright Act.... [Napster is] much more about community. We are not interested in people doing anything illegal."
The Napster software user agreement says that "copying or distributing unauthorized MP3 files may violate United States and foreign copyright laws. Compliance with the copyright law remains your responsibility."
"If you download a file, and weren't licensed [to do so], then there's going to be an infringement issue," said Mike Sobel, attorney at Grant and James, an intellectual-property law firm in Palo Alto. Napster probably won't get sued for making the program, he said, but individuals who use it to trade pirated copies could possibly be sued for copyright infringement. And the logistics of going after each one would be tough. "It seems Napster is taking advantage of a short-term loophole," until the major labels agree upon a technology standard and release CDs with more secure technology to prevent unlimited copying of files, he said.
Napster's Richardson said the company doesn't host any music files on its servers. Some attorneys said Napster, and even Napster users, could be categorized as Internet service providers.
According to the DMCA, ISPs must take action -- like shutting down a user who is distributing pirated material -- if they are alerted to illegal activity, said Arnold Lutzker, partner of Lutzker & Lutzker law firm in DC.
Intellectual property "owners could take action against Napster, making Napster produce system logs that would prove and identify the alleged, so-called piracy," said Jim Griffin, CEO of OneHouse, a consulting firm to music companies, in an email.
Napster says it wants to help people sell more CDs.
"This is new territory for lots of people, and new laws are going to be made surrounding these issues. The last thing we want to do is to piss off artists," said Napster's Richardson. "We believe [that] just like radio, the more people hear songs, the more they want [to] buy the CD."
It's early, and time will tell how popular Napster gets.
"Napster is a ... poorly coded program, but is extremely functional," said Angelo Sotira, who founded Dimension Music, which was recently acquired by Michael Ovitz.
"I have a hard time believing this will take off because it's giving outside ... access to [a user's] PC. It's much more invasive from a security standpoint," said Launch.com's Goldberg.
"We've hired a security expert," said Napster's Richardson. "We are very interested in ... security issues."
And at least one company that specializes in security for music wants to work with Napster.
"A broad-minded person would view it as a natural extension to what we're trying to accomplish," said Arnold Brown, president and CEO of Mjuice, a music site that offers downloads in its own proprietary format with added security. "We'd love to work with them to distribute secure files."
