Musicians are furious that new technology has destroyed their income. Record labels are cautious, but eager to strike deals with rising platforms. Fans are happy to access songs for a pittance, even when they're screwing over their beloved artists.
Fears about today's streaming economy echo the existential panic when Napster debuted in 1999. The peer-to-peer service, where fans exchanged catalogs of MP3 song files, devastated the record business. It helped demolish billions in record company revenue, forcing a sclerotic industry to reevaluate its entire model. He disputed loyalties between fans, artists, technology companies and record labels.
The 1999 project
All year long we will commemorate the 25th anniversary of the pop culture milestones that remade the world as we knew it then and created the world we live in now. Welcome to the Los Angeles Times' 1999 Project.
But beyond its effect on music, Napster also heralded a disturbing new ethos in technology: becoming ubiquitous before the law can stop it.
“Years later, Napster remains an example and inspiration in Silicon Valley,” said Joseph Menn, author of “All The Rave,” the definitive history of Napster (and former Times reporter now at the Washington Post). “Uber and Airbnb took the same approach: deregulate taxis and hotels to give people something they want and grow so big that eventually politicians will be on their side. “Napster created this whole wave of anti-hero entrepreneurs.”
When Northeastern University student Shawn Fanning and his business partner Sean Parker launched Napster on June 1, 1999, music was still largely consumed through compact discs, which labels sold at huge profits. Fans had ways to trade songs, from recording radio to recording mix CDs, but nothing like this.
Fanning saw how an easy-to-use platform could take the curiosity of song sharing and scale it through MP3s, shared over new broadband Internet connections on college campuses. Users posted their digital music libraries online so anyone could view and download them themselves over a decentralized network.
The Napster logo, lower left, in 2003.
(Bruno Vicente/Getty Images)
“They incorporated an underground hobby,” Menn said. “No one is going to go out and buy 100 records, but here the music offering was endless. It was always a social lubricant to make a mixtape for someone you wanted to hang out with. “Now you can do it at scale.”
Within months, Napster was either a mortal wound to the recording industry or an incredible marketing and audience research tool, or maybe both at the same time.
“The recording industry spends millions [promoting] new bands,” former CEO Eileen Richardson told The Times in 2001. “I saw Napster as a way to test the market and offer new music artists for virtually nothing.”
Estimates vary, but tens of millions of people downloaded the service, back when high-speed Internet was a rarity in homes. A quarter of all the university's Internet bandwidth was used to share music on Napster. Fans no longer had to buy a $20 CD just to get the two songs they liked: they could release all the songs on Napster for free. A $40 billion recording industry began a decline that would eventually wipe out half its value.
“One of the reasons Napster was born was because the record business exploited users,” Menn said. “People were willing to pay for a reasonable digital alternative. But by not providing that, record companies couldn't do anything to rip a CD to your computer.”
However, record labels weren't sure whether they should sue Napster into oblivion or pay them hundreds of millions to get a piece of the action. Lawsuits from the Recording Industry Association. of America targeted both Napster and individual music fans who had downloaded songs, earning the ire and derision of the record-buying public.
At the same time, Napster got deep into negotiations with Vivendi Universal's Edgar Bronfman Jr. and came close to reaching a deal with the record labels to become a legal service.
“It could have gone either way,” Menn said. “The record companies would have had a stake in the property. [German media conglomerate] Bertelsmann gave a large loan to Napster to keep the pirated version alive while they developed a legitimate system. They couldn't make it, but the record business had a motivation to close a deal, because what would come next was unstoppable.”
Executives at Fanning, Parker, and Napster (including Richardson and his successor Hank Barry) were plagued by infighting from the beginning, especially over Fanning's uncle's 70% ownership stake. “There were horrible conflicts at the board level that effectively derailed most of our strategies,” Liz Brooks, Napster's former vice president of marketing, told the Times in 2001. Yosi Amram, a former Napster board member, said then told the Times that the company “wasted a series of zigzagging opportunities. It did not have strong, clear leadership.”
But they knew there was a legitimate business to build with paid digital access to songs, even as record labels were reluctant to break away from the lucrative CD model. If just a small fraction of Napster users bought the records they discovered there and labels could reach them with granular data about their tastes, this could be transformative.
“Napster knew more about the customer than the record labels,” Menn said. “They had access to your music collection, they saw what people downloaded. They might say, “Bobby likes Led Zeppelin and he's curious about AC/DC. Here's his email address and you can let him know when AC/DC releases a new album.” “That was the great value proposition.”
In September 2001, Napster paid a $26 million settlement to copyright owners, and the company filed for bankruptcy in June 2002. It was relaunched as a paid legal service under the software firm Roxio in November 2002. , but the industry had moved on. Apple's Steve Jobs had pushed a similar offering for digital music: a clean interface where users could download individual songs for 99 cents.
Faced with new piracy sites like Limewire and Gnutella, labels chose Apple and iTunes. Along with the 2001 launch of the iPod, a portable MP3 player with room for (gasp!) 1,000 songs, the future had arrived.
It is striking that the arguments around Napster are basically the same as the grievances about streaming today, only the heroes and villains have changed sides. Manning, moon-and-star-faced on the cover of Time magazine in October 2000, was widely regarded as a plucky music fan who stuck to greedy labels and out-of-touch millionaires.
Drummer Lars Ulrich, left, of Metallica, testifies before the Senate Judiciary Committee on Internet music in 2000, as Roger McGuinn, center, of the band The Byrds and Hank Berry, right, CEO of Napster, look on.
(Joyce Naltchayan/AFP via Getty Images)
Lars Ulrich, Metallica's drummer, became the face of the backlash against Napster, but alienated his own fans. Ulrich personally delivered 13 boxes of documentation to Napster's offices listing hundreds of thousands of users the band suspected were illegally sharing their songs.
“It's not that Lars was seen as wrong, he was just so unrock 'n' roll,” Menn said. “He was considered to be on the traitor side of the spectrum. The letter of the law says he is right, but it was inherently unpleasant to side with big business over fans.”
Now, however, the really big companies are the tech giants inspired by Napster's bravado. Parker invested in Facebook a few years after Napster collapsed and, as its first president, helped secure full control of the company by Mark Zuckerberg, eventually making Parker a billionaire. Facebook's house motto was “Move fast and break things,” an apt description of Napster's impact as well. (Paryker, in clever stunt casting, was played by musician Justin Timberlake in the movie “The Social Network.”) Companies like Uber learned from Napster that if you ignored regulations and grew quickly, the law and the industry would bend to your wishes. business model.
“The dot-com boom was a frenzy of stupid companies going public, but Napster was a legitimate technology,” Menn said. “Peer-to-peer was a fantastic innovation, but it was captured by capitalism at its peak. “It corrupted the way technology was developed.”
Meanwhile, Fanning sold his video game communications platform, Rupture, to Electronic Arts and ran some short-lived chat and social media apps. He never achieved gigantic wealth commensurate with his place in the history of technology.
“He was the poster boy, but he never controlled Napster,” Menn said. “He was a good guy from a poor background. He was quite shy and forced himself to be in the public eye, and then retreated to his reclusive self. He did well afterwards, but he was no titan.”
Today, the recording alliances between art, commerce and fandom have changed again.
Record labels, desperate to avoid making the same mistakes, invested early in Spotify to ensure they controlled the future of streaming. Now, only superstars like Ulrich can make money from streaming. Independent artists who were cool with Napster in 1999 are now protesting outside Spotify's offices and working to unionize.
TikTok's recent fight with Universal Music Group was emblematic. Is it better for artists to have massive, free marketing opportunities or to be paid fairly by huge tech companies? Given the imminent influence of artificial intelligence on culture creation, who can you trust to look out for your interests?
The answer is the same now as it was in 1999: probably no one.
“The continuing theme in the record industry, from vinyl to Napster to streaming,” Menn said, “is that bands get hurt in every iteration of the system.”
