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-dan's napster report

5/28/00- Some of you may have seen MTV's special report on Napster last Thursday; probably the most interesting thing the station's aired in a while. For those of you that don't know what Napster is- it's a MP3 file sharing program that lets the world share their MP3s with each other. For those of you that don't know what MP3s are- umm, nevermind (after all, it has replaced the word "sex" as the most searched word on the internet).

  While the show didn't really introduce anything new or surprising, it did clue the world onto where a lot of musicians stand on the topic. While a good portion are anti-Napster, the software does have its share of big-name supporters, like Bloodhound Gang, Offspring, Courtney Love, Kittie, and of course Limp Bizkit (whose free summer tour is being sponsored by Napster).

  A lot of people have asked how Napster makes its money. It's free software, and there's no ads, how can they afford to sponsor a Limp Bizkit tour? All of Napster's money comes from investors. A Business major friend explained that it all makes sense in the long run... but I heard enough. The controversy is where it's at.

  Fact is, the recording industry has made a living out of ripping consumers off. And now that the consumers have a real alternative to their monopoly, they're getting pissed. How have they been ripping us off? I'll explain. Most people know that it costs them less than a nickel per CD made, yet most record stores sell CDs between $15 and $20. Now there are a lot of other expenses that need to be accounted for- artist royalties, insert design and various other parts that add up quick. However, if an album sells about 2,500 copies (average for a "no-name" band), they will still make ok money selling the discs at $5 a pop.

  What about big artists like Eminem who sell more than one million albums in the first week? Profit could still be made selling those albums at $1 each. But why sell them at a super-low price when there are a million suckers out there with $15 to blow, right? Of course I agree they should sell for more than $1... I mean, a good selling album should turn in good profit... but $5-$9 is a reasonable asking price. If CDs were that much, consumers would be a lot less likely to rebel. Remember- CDs cost less than tapes to make, so you know you're getting ripped off if a CD you buy costs more than the same album on tape.

  Back to Napster- created by college student Shawn Fanning after he decided MP3s were just too hard to find on the internet. Now there are millions of Napster users, and songs have never been so easy to find. Even though Napster is just the file sharing software, Metallica sued the company for copyright infringement. Their goal was to bring Napster down (because Napster uses a central server, it can be shut down). When that didn't work they gave Napster a list of 317,000 users that were sharing Metallica songs, and all of those accounts were banned by Napster. Of course there is plenty of software that doesn't require central servers like Hotline and Gnutella that can replace Napster in a heartbeat if needed.

  The MTV special as expected came with plenty of interesting quotes, perhaps the funniest from Amy Kover of Fortune Magazine: "There's very few uses of a bong other than smoking dope, but what a headshop will tell you is 'oh we just sell that... i can't believe they're actually using that for for illegal drugs.' And in some ways Napster is doing that... they are the bong of piracy.". What a metaphor.

  My favorite quote came from Billy Corgan of the soon-to-be-defunct Smashing Pumpkins: "Music is ultimately gonna be free." He agrees that it's the record industry that needs to change.

  What widespread availablity of music actually does is even the score- record companies not needed. It helps the smaller bands get known on their own, and keeps the big bands from getting too rich. Record companies for years have been legally stealing from consumers and musicians, and finally we have a means to "steal" back. Now I don't support copyright infringement at all, but it just may be our only means to fight the system. Yeah, rock on!


Related Links:
  • How the music industry has been stealing from you all along
  • Macworld's view on the RIAA/Napster debate
  • RIAA's laughable reasons to "justify" the cost of a CD
  • Albany's Fox News Napster Coverage (quicktime file)