Napster: It's Not Just for Music
Andrew Richard Albanese -- 8/21/00
Do Napster and its file-sharing imitators represent piracy or potential profits? All the copyrighted music you want--for free.
As the recording industry's legal challenges to Napster, the MP3 file-sharing pioneer, continue to mount, publishers are warily assessing the potential impact of peer-to-peer file-sharing technology on their own content business. Will programs and services like Napster, which allow for the free trade (in every sense) of digital files among users wreak havoc on publishers' bottom lines? Or will Napster and its imitators open a vast new market for publishers' content?

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For those not familiar with how MP3 trader Napster works, simply put, the program turns the hard drive of every Napster user who is logged onto its site into a central library. Want to hear a song? All you need is your computer, and a reasonably fast Internet connection. Loading the free Napster software is a snap. And once the software is installed and you're logged on, simply type in the name of the song or artist you're looking for, and the program will search the directories of all users logged on at the time and return a list of those who have your requested item. You then click on your choice, connect directly to that user's directory, and the song is downloaded automatically. It's as simple as that. No copyright clearance. No payments. No waiting. And you can find virtually any song you can think of. Nothing g s out of stock. In short, Napster offers the ultimate consumer experience: more choices, more convenience and a price point users like--absolutely free.

It's the free aspect of Napster that has the company currently fighting for its business life in court. The Recording Industry Association of America (supported by the Association of American Publishers) claims Napster is little more than a tool for copyright infringement and wants the service shut down. But the powerful delivery model made popular by Napster--the site claims a whopping 22 million users--has caught the attention of retailers and content providers. And as publishers begin to embrace the concept of digital delivery, they know the possibility of their content being made freely available at the click of a mouse is very real.

Reading the E-leavesNo one is quite sure yet what this technology will mean for book publishers. But it appears audiobook publishers are poised to deliver the first insights. The popularity of publishers' spoken-word offerings in the MP3 format is surging, as evidenced by companies like, Audible Inc. and; the latter. claims more than eight million total online visits in May 2000.
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"MP3 gives us a tremendous amount of flexibility," explained Mary Beth Roche, a spokesperson for the Random House Audio Publishing Group. Random House, bullish on the digital future these days, recently entered into an agreement with Audible Inc. to offer audio titles in MP3 format over the Internet, a deal Roche thinks will vastly expand the market for spoken word. "The MP3 format provides for a real variety of content--abridged, unabridged, something that's 20 minutes long, something that's six hours long. It also gives us the opportunity to do short stories, speeches and it allows us to serialize books," she said.

Initially, Roche thinks MP3 file-sharing programs will increase interest in audiobooks by making free samples easily accessible. But, she conceded, with the "Napster-ization" of the Internet, piracy is a major issue. "Our number one concern is protecting ours and our authors' interests," Roche said, noting that RH Audio is "rigorous" in selecting responsible partners, and that Audible Inc. employs state-of-the art encryption technology.

Legal Napsters?"Harnessing the peer-to-peer platform to distribute information over the Internet has enormous potential, as anyone can see from Napster's meteoric user base," said Frank Biondi, former chairman of Viacom and the current chairman of Waterview Advisors, a private investment firm. "The reason the entertainment community has yet to embrace [file-sharing] services has been a fear of copyright infringement."

That seems likely to change. Biondi recently became an investor in an Internet venture called, a Napster-like spinoff started by two of Napster's original investors, Bill Bales and Adrian Scott. The company promises to create its own peer-to-peer network for trading "anything digital," including publisher content. But unlike Napster, Applesoup will provide a mechanism for copyright clearance and payment. Licenses its content, but was sued anyway.
And Applesoup is not alone. As the Napster lawsuit moves through the courts, other Internet ventures, aping the Napster model, have come on the scene., launched late in 1999, counts Hollywood talent manager Michael Ovitz among its investors, and bills itself as a "broadband entertainment portal," helping users find all kinds of content, from music to video, from anywhere on the Internet. also offers content for download on its site, and like Napster, users can log on, search and share files. But even though's president Dan Rodrigues said his service respects intellectual property, mainly through license agreements with content providers, the company recently found itself in the same position as Napster--being sued by a wary alliance of entertainment industry groups unconvinced that the company can enforce copyright protection.
Is Copyright Dead?As dedicated as these new Napster-like businesses are in using the peer-to-peer model to legally expand the marketplace for intellectual property, an equally dedicated faction is determined to overthrow the copyright laws. "The idea that information is property is somewhat ridiculous when you examine it closely," said Ian Clarke, the developer of yet another peer-to-peer file-sharing program called Freenet (, which is still in the works. Unlike Napster, Freenet users will remain virtually anonymous, meaning users can trade anything digital from their hard drives, directly and untraced. And because Freenet d s not reside on a central server, like Napster, there is no way to shut it down or track usage. In essence, Clarke maintained, it could render some copyright laws unenforceable. And to Clarke, that's a good thing. "Copyright was designed for a time when information was distributed using a printing press," he declared to PW, "not for the digital age."
Publishers' nightmare: Freenet says to heck with copyright.
Freenet is not alone. Gnutella (, perhaps the most well-known file-sharing system after Napster, reported a sharp spike in traffic after a federal judge issued an injunction in late July that would have shut Napster down until its upcoming trial (Napster's appeal has delayed the injunction). Like Freenet, Gnutella d s not rely on a central server, and is a virtually anonymous, user-to-user network. While it's a bit more complicated to use than Napster, users can download the Gnutella application for free, and access anything that other users make available, including audiobooks, e-books, movies or music.
So how will authors, musicians, artists and publishers get paid in the future? "I think that artists and writers can still make money through inviting voluntary contributions towards their work, rather than forcing people to pay for information," Clarke told PW. "This model works fine in software with shareware, and should work for other types of information."
That model appears to work for novelist Stephen King. King reports on his Web site that he is delighted with the results of his voluntary "pay-per-chapter" experiment The Plant, which as of July 31 boasted more than 152,000 downloads, with 76% of downloaders paying.

For publishers, however, things may be a little stickier. But Clarke isn't concerned. While peer-to-peer file-sharing ventures like Napster and Freenet may be perceived as a threat to the traditional publishing and recording industries, he pointed out that the same was said in the past of radio, television, photocopiers, VCRs and other technologies. "Artists and publishers all adapted to those new technologies and learned how to use them and profit from them; they will adapt to Freenet as well," he said.