HTMLGOODIES EXPRESS ™
August 7, 2000– Newsletter #92

Greetings, Weekend Silicon Warriors,

Usually I am a week ahead on my newsletters, but now and again something pops up that makes me want to hurry up and push out an opinion. The NAPSTER court case is just such a topic. I’ll state my opinion right up front so that I you can get a handle on where I am coming from.

I am not a fan of how NAPSTER works in its present configuration. I think it’s wrong. I think it is people circumventing the monetary side of music.

No, I do not think NAPSTER should be disbanded, but I do think it should be set up a little differently than it is right now. I like the idea of instant music. I love the thought of creating my own CD by just choosing the songs I want. Yes, I know there are sites where I can choose the songs right now I just don’t really want any of the songs that are offered. I would like to choose from current songs and make compilations. NAPSTER would allow me to do that. The problem is that someone has to pay for that compilation.

As it stands right now (things may change by the time you read this), NAPSTER would have been shut down today (Saturday) at 3 PM, but an appeals court has granted a stay allowing the site to remain up and running. The Recording Industry Association of America (RIAA) will now appeal and take it one court level up to the full 9th U.S. Circuit Court of Appeals. This decision/appeal process will go on a few more times until a final ruling stands by a higher court either refusing to hear the case or the Supreme Court gets a crack at it.

So as it stands, NAPSTER stays alive and kicking and people are going nuts trying to download every piece of music that they can get their hands on. The source of their music may die soon so they are getting what they can while they can. That just makes sense to me.

In this newsletter I wanted to offer a rebuttal to some of the more prevalent pro-NAPSTER arguments I am hearing being given through the news media. Let me state again that I am not against NAPSTER, I just think it had to be run differently to become legal. I’ll get to my suggestion for new business practices before the newsletter is over.

1.NAPSTER is just allowing us to get at the music unknown artists put on the Web.

If that were the case, then NAPSTER wouldn’t be in any trouble. The original concept, to allow people access to music artists put on the Web freely, is great. If the people who used NAPSTER, or NAPSTER itself, would have made a point of keeping en eye out for copyrighted music and took steps to stop people from trading it, they might not be in this position. They did not. They knowingly allowed people to pirate songs and trade them freely.

2. NAPSTER is not to blame. It’s the people that are pirating the music that should be prosecuted.

Maybe they will be. NAPSTER, buy virtue of its use of a central server system to track, search, and trade copyrighted files provided the ability to break the law so they are seen, at least, as accomplices to a crime. One cannot provide a method of doing wrong, assist in the act, and then step away expecting they will be seen as clean of the crime.

3. Why should I be forced to pay $15 to $20 for a CD that only costs $2 to make?

This is an argument that is guilty of the sin of omission. First off, no one is forcing you to pay anything. If you think the price is too much then listen to the radio or watch the music channels on TV. They play all the hits. If you don’t want to spend the money then don’t. Yes, I know that’s not a very viable response and I knew it wouldn’t be. It was simply my knee-jerk reaction to a person who feels they are being forced to spend money.

The real problem I have with this argument is that it’s simply not true. Yes, the materials and process to create a CD itself may very well be only $2.00, but that’s not taking into account the numerous other costs that go into supporting and promoting an artist. There are so many other costs that must be factored into a CD.

Still, I agree with you that CD prices are high and that profits are huge. That leads me to my next argument.

4. These artists are rich. They have enough money so I don’t feel bad about taking some of their music for free.

Well, how you feel is fairly unimportant to this case, so let’s focus on the fact that artists and record producers have enough money. Let’s say the cash flow was to you. How would you like it if, at any point, someone else decided you had enough money? I don’t care if you make $6 an hour or $6000 an hour. At what point in your financial dealings does someone else get to make the decision that you have enough money? I make a fairly good living writing for HTML Goodies and teaching, but I would never turn down a raise. I would go ballistic if all of a sudden someone informed me that I had made enough money and that I can just live on what I have right now or a greatly reduced sum because someone else says so.

Many people consider wealth something that should be limited at some point. As long as the wealth is made legally, I have no trouble with amounts. If you do, then remember that when you become well off and reach a certain pointstop taking money.

5. The only way to keep file-sharing technology from moving forward is to force us all to return to using 486 computers with 14.4kbps modems.

This is an age-old argument that basically goes you can’t stop us so just let us do it. That’s just not an argument at all. You mean that if a large enough group of people decide to break the law that the law should be changed to accommodate what people are doing? If 50% of all drivers decided that they will now begin driving 100 miles an hour, should the law be changed because the police will simply never be able to catch everyone?

I can see this form of protest if there is a great injustice being done by the law, but no matter how you frame the RIAA, it is not harming anyone’s civil rights by selling CDs.

6. Cassettes did not hurt the recording industry, videotapes did not hurt the movie industry, and music trading will not hurt the music industry.

Again, this is not a viable argument. The advent of computers has allowed copies of songs to flourish. Instead of a song being copied onto a cassette a few times or videotape being copied a few times, now one copy of a song can be copied literally thousands of times per day and distributed with great speed. This, I believe does have the ability to harm the music industry. I need only copy the music once and post it. An hour later that song could be in the hands of 10 thousand people. That’s a whole lot different than the technology of copying available through cassette and video (which is also illegal if not for private use). In addition, the there could only be so many copies of a videotape or cassette. After a few generations the sound quality would be so bad it wouldn’t be worth listening to. A digital copy created today can be copied, the copies can be copied, and so on with no fidelity loss. The variables have changed. Comparing the process of ten years ago against the technology of today is like comparing apples to oranges.

7. NAPSTER acts as merchandising. People hear the music and will then go buy the CD.

There may be some truth in this right now because the vast number of people using NAPSTER need to be in front of their computers to hear the music they swap and that’s not very convenient. Buying the CD does free people to listen to the music in their car or on headphones. If allowed to roll on unchecked though, this will soon not be the case. I am starting to see numerous gadgets for sale that take the MP3 files and record them to various portable devices. There are right now walkman-style MP3 players and portable CD players that run the files. Technology will only get better and within a year will end the merchandising effect of NAPSTER.

8. NAPSTER is just like radio.

AAAAAAAAAAAUUUUUUUUUUGH!

This is the argument that just drives me straight up a tree. NAPSTER is no more like radio than it is nuclear physics. However, that statement does hold within it the answer to the NAPSTER problems.

First off, let’s look at a song on NAPSTER. Someone does buy the CD. There a commission is paid to the artist. That person copies the song, posts it for all to copy and the money trail to the artist and recording company stops. Now radio

A song is sent to radio and radio plays it. But what some of you may not know is that radio stations pay fees to be able to play that song. Most commercial music is licensed by one of two firms, ASCAP or BMI. Yes, there are always songs sent to radio stations that do not have representation. Local bands would send me tapes all the time. However, the majority of the music is licensed and my radio stations would pay fees to ASCAP and BMI. Radio stations can either pay what’s known as a blanket fee, which is a flat rate or a fee based upon what songs you actually played.

Either way, twice a year we would send three days of our music play-lists off to the licensing firms. Those firms would in turn tally the number of all plays a recording artist received and pay them royalties from it. They more you were played, the more you got paid. Before the advent of computerized play-lists, I remember having to write down every song I played, the artist, the authors, the label, and a few other things. Ugh. What a pain. It even goes as far as music used in commercials. I did the voice work for one car company that like the Bachman Turner Overdrive song Let it Roll behind their commercial. We had to note that when sending in the forms.

So, as you can see, radio and NAPSTER are pretty darn different, but using radio as a model, I think we can alter NAPSTER a bit and actually make it viableand cheap.

My suggestion is that NAPSTER would run much more like a radio station. To begin with NAPSTER must be made to pay fees on the music ASCAP and BMI licenses. These fees will, of course, change depending on how many copies of a certain song move through the central NAPSTER server. Yes, NAPSTER can keep tabs on all of this how do you think Metallica received the names of all the people that downloaded their music?

Now, some of you are thinking that if NAPSTER has to pay the fees for everyone that swaps the music, they will go out of business. That’s true. It’s too much money for one site to have to pay. What will need to happen is that people who wish to use NAPSTER will pay a fee structure. An account should be set up attached to a credit card that keeps track of what songs a person swaps. Each time the person swaps a song they should pay a small amount. I base this one what I know my radio stations paid in fees.

The amount will certainly be small too. (At least it should be if everybody plays fair) At this point you are just paying on the royalty plus a small bit for manufacturing. You’ve eliminated a middleman. The music industry would in effect be selling directly to the consumer. I could go in, set up and account and swap ten of my favorite songs and burn my CD, legally, for a few bucks. I get the music, NAPSTER pays the royalties, and everyone is happy. Well, almost everyone.

Of course some people will have a fit at this point because even two or three bucks will be too much for them and they will start trading around NAPSTER. Fine. NAPSTER will be legal and those people will be the ones the RIAA will go after.

NAPSTER could be the central database for legal music distribution. Those artists that post their music to the Web freely should be kept separate from those songs that are not. That way people could swap that free music to their hearts content without touching the fee-based music.

In addition, once NAPSTER gets the recording industry on their side, the MP3s that will be swapped or bought could be far better quality. You could have numerous versions of songs. You may be able to start swapping out takes or first takes that people never get to hear. Maybe you don’t want the dirty language fine. Just grab the version that’s been edited. This could be great.

If NAPSTER sticks to this fight and remains on the same course that have chosen, they’re going to lose and the site will be shut down. My suggestion is rather than dig in your heels and fight a losing battle, start to work with the people that represent the music.

Make music something that can be downloaded legally for only the royalty fee plus a small percentage to cover manufacturing. I would think you could get a song for pocket change if the RIAA plays fair. That’s where we’d see some true colors, huh? If NAPSTER decided to try a deal like this would the RIAA attempt to bolster the price so that a CD created online would cost the same as one in the store? I hope not. That would be unfair.

If all play fair, I think online music could be one of the greatest ideas yet because, in all honesty, I hardly ever like an entire album anymore. I just want one song from this group, two from this group, and another one from another group. This would be perfect.

Maybe we could even get back to the 1950s style of music producing when singles were the thing and groups that only had one song were given a chance because the medium allowed it. That might see the end of albums that have one great song and twelve losers. The 45 could be king again. That would be great.

Well, the 45 CD.

>>>>>>>>>>>>>>>>>>>>>>>>>

That’s that. Thanks for reading. Your emails are great. Thanks for writing after each newsletter. I’ll do my best to get something out on Carnivore yet.

Joe Burns, Ph.D.

And Remember: How many grooves are there on one side of a 45? It’s standard you know. One. It starts on the outside and just keeps going in until it ends near the middle.