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 Recent Stories
   Judge Rules Against Napster in RIAA Suit
 
Beyond Napster
By David Armstrong   Fox Market Wire
Metallica might crush Napster, the young music-swapping software company that lets users download music from other people's computers for free. But what about similar programs like Gnutella? MP3Exchanger? Netbrilliant? IMesh.com?

Critics of such companies fear they pose a serious threat to the traditional recording industry, decreasing the number of people who buy conventional CDs. Such a possible decrease has prompted Metallica and other musicians to sue Napster on the grounds that it allows people to steal copyrighted material. But trying to stop all the music-swapping technology may be like trying to put the genie back in the bottle.

Many of these companies aren't fazed by the prospect of litigation. Some say they are willing to work with the recording industry, while others say the recording industry must change its business or be left behind.

"Today's media sharing technology allows for a separate distribution model," said Tyler Bovitch, the president of Indiegruv, Inc., a small company that offers its MediaShare file-sharing software over the Internet for free. "It eliminates the dictatorship of traditional music industry leaders from deciding which 16-year-old, breast-augmented, bubble-gum-chewing pop-singing puppet you're going to listen to today."

Indiegruv's MediaShare software allows users to connect in real-time, sharing their audio and visual files with other users around the world. Like Napster, MediaShare doesn't have a central area where music files are recorded, stored and distributed. Bovitch said that it is the decentralized nature of the distribution chain that will force the recording industry to adapt to the new technology.

"Only those components of the industry trying to stop this consumer driven tidal wave of change will be drowned," he said. "Whereas those that can adapt and become part of it will survive."

A source from the Recording Industry Association of America, which filed its own lawsuit against Napster, would only say that the association is keenly aware of the "Napster clones." But the association can only take legal action if there is evidence that these other companies are facilitating the distribution of copyright materials.

But there is no evidence yet that consumers are flocking to these file-sharing companies to download music. Apparently, few music listeners will sacrifice the packaging and portability of a CD.

Regardless of these obstacles, some legal observers say that widespread sharing of audio and visual files is inevitable, and that the recording industry should accept this ultimate outcome and keep copyrighted materials on the Web.

"What we are seeing is a panicky overreaction on the part of many copyright holders to overprotect their intellectual property," said Robin Gross, a staff attorney with the Electronic Frontier Foundation. "In the case of Napster, we are seeing a crackdown on the technology itself."

It is not technology but the use of it that poses a problem for the recording industry, she said. "The consumers are really the ones who have the control."

Gross added that not all musicians are against such technology. "Many copyright holders are looking at the distribution and viral marketing that Napster-type technologies (use) as a way to create greater value for their works," she said.

Christian Carrillo, the CEO of Tenebril, Inc., the Cambridge, Mass., producers of file-sharing program Netbrilliant, said the new music-swapping companies must work with the established record labels if they are to survive. He pointed out that if recording artists aren't compensated for their work, their production would decrease and music-swapping companies would have nothing to exchange.

"We recognize the absolute necessity of maintaining a legitimate market for information, not only songs but all types of digital information, for the continued investment in and growth of the Internet," he said.

But the fact that Napster-like companies don't have a viable business model might affect their ultimate influence on the recording industry. How does a company make money by freely giving away software that allows users to swap MP3 files?

MP3Exchanger, a program from private Canadian company Software Bugs Unlimited, offers a possible answer. Upon a record company's request, MP3Exchanger will block users from downloading a particular artist's files. Then, according to the company, it is up to the record label if it wants to ignore the MP3Exchanger community, or market the music to them. Labels could let users download 30 seconds of music for free. For any more time, the listener would have to pay.

MP3Exchanger also pays users for clicking on advertising banners, letting them build up an account that they can use to pay for downloading the music.

While this model won't stop people from sharing music on the Internet, it will help record companies locate true music fans, said Bryan Hayes, the director of software development for Software Bugs Unlimited. Both the file-sharing company and the recording industry could then benefit from Internet ads.

Hayes has not yet been in contact with any record label, but is convinced that a compromise between the old and new ways of distributing music can be reached.

"It will take only one little record label or a bunch of unsigned independent artists to start using MP3Exchanger and selling their songs for pennies to prove my business model," he said. "The rest will follow."


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