A judge's good news-bad news ruling Monday gave new hope to Napster's quest to breathe new life into the music industry. But major music companies continue to make it clear that they'd prefer this over Napster's dead body.
The situation is reminiscent of a graceful gazelle on the African plain who strolls up to some lions to announce, "You know, if you cut down on the meat and ate a high-fiber diet, you'd benefit in the long run." If one could paraphrase the pride's answer, it would be something like, "Great idea, but don't you think we're the ones who should be making that decision? ... Mmmm, tasty!"
Thanks to the latest move in this cat-and-gazelle game, Napster won't be shut down immediately, as its critics had hoped; instead it appears the company will have a least a few days before it knows exactly what restrictions -- perhaps a shutdown, but not necessarily -- a federal judge in California will be placing on its operations in advance of a forthcoming trial.
So the well-being of privately held Napster continues to hang in the balance. Presumably, the major labels --
Universal Music Group,
AOL Time Warner's
Warner Music Group,
Sony Music Entertainment,
BMG Entertainment -- are strong enough to keep going no matter what happens. (BMG, one of the original plaintiffs in the copyright case against Napster more than a year ago, last October announced an agreement to work with the company to develop a service it finds acceptable.)
The music companies, grappling with the obvious demand for free music over the Internet and trying to figure out how they can translate that into revenues and profits, make it very clear they want to use the Internet to promote, distribute and sell their artists' works. But like a lion that can't help itself when a gazelle passes by, they seem awful brutal to anyone who thinks the gazelle can make a constructive contribution in a form other than a carcass.
A recent example of this mindset at work came during AOL Time Warner's analyst day last month, when Warner Music Group head Roger Ames talked about the Internet's effect on his business. Digitized music delivered over the Internet "will produce new revenue streams," he said. "It will expand the consumer market, and most importantly, it will expand consumer choice by making all music available all the time."
Sounds great. But then he talked about what the company was doing with certain online music efforts that were not AOL Time Warner initiatives. And that was, well, sue them out of existence, because they're pirates. "We do have a plan to deal with Napster and other illegal services," Ames said. "Firstly, we're pursing infringers under the law. We had a successful lawsuit against
, got paid quite a lot of money as a result. We had one against
; they went out of business. And, of course, we continue with our lawsuit against Napster." Continued Ames, "Lawsuits have the effect of closing off venture capital to these companies. This legal strategy, we believe, will help keep the infringers to hobbyists."
As Ames acknowledged, the company is looking for a business model that "will benefit music companies as well as consumers." But it doesn't appear to be looking at start-ups for that model.
America Online CEO Barry Schuler wasn't quite so negative on Napster; he didn't call the service illegal, but he was skeptical about Napster's plans to turn the Napster phenomenon into a business. That process will be difficult, he said at the analysts' day, "only because what has been behind Napster's growth is the fact that it's fun to share music, and it's fun to do it for free."
During a postruling press conference Monday, Napster CEO Hank Barry said, as he has before, that Napster is good business for the record companies -- that Napster members purchase more audio CDs than most people. "The Napster community is about the love of music," he said. Too bad for Napster that most of the major music companies aren't interested in Napster's opinion on that particular issue.