Napster and Bertelsmann: Fast Forward the Future?
November 27, 2000
The issue is not so much whether it is technically possible: the issue is whether we want Napster and Bertelsmann to define the future of online music distribution. For about US$1, people can reproduce at home in near-perfect quality, what they would have to spend $15 for at a retail music store.
That fact makes CD music even more "e-ifiable" than books or videotapes. The question is, should Napster be the company that defines the architecture for how this all works?
Leaving aside the legality of Napster, there is no denying that it is a cool hack and Shawn Fanning is a clever guy. I'd hire him if he walked in the door of my programming shop. He should be able to use Napster pre-IPO equity to hire whomever he needs to make it work, and he has a $50 million loan from Bertelsmann to pay for office furniture and foosball tables.
In any case, there is no real groundbreaking technology needed: a solution could be cobbled together using existing knowledge about compression, encryption, public-private key cryptography, and so on, backed up with the communication power of the Internet.
My concern is whether Napster -- and/or Bertelsmann -- can accomplish the more basic task of properly defining how it should work. Not on a technical level, but on a consumer level. As I see it, there are two central issues: when should music be paid for, and how should it be distributed. Current versions of Napster avoid the payment issue altogether, but resolving that issue is the key to the Bertelsmann deal.
The simple case is obvious: if I connect to an online music store and buy a CD, I should pay the full cost determined by the seller.
Now what if a friend of mine who owns the music sends it to me, and I decide to "buy" it from him. Presumably I should pay something for this, but should it be the full amount? After all, the store selling the music is not doing any work for that sale. So perhaps I should still pay the royalty amount to the artist, label, etc. but somehow avoid paying the markup that the store normally tacks on. And how about my friend? Does he get some sort of commission on the sale?
In this simple example it seems silly, but imagine an online music magazine that worked hard to uncover obscure music, write about it and promote it. Shouldn't they get a cut of any resultant sales made directly from their Web site? Once the cost of an album is being sliced up this way, you can take it even further. Can I buy only the album tracks I want? Are the cover and liner notes considered a separate commodity from the music, which I can elect not to buy? If I buy a compilation that includes a song I already own, do I have to pay for that song again? The list goes on.
Now imagine that my friend just wants me to listen to the music a few times. Or he sends it to me to try to get me to buy it, but I decide not to buy. Does this cost me anything? Does music sent for review purposes "expire" after a while? If so, what is to stop my friend from repeatedly re-sending the file to me each time the previous copy expires?
Finally, what if my friend wants to give me his copy of the music, a simple transaction in the physical world. Can he do this with an online purchase? How does the system ensure that he no longer has access to his copy? He has probably burned a CD of the music, rather than just keeping it on his hard drive. Is that CD somehow different from a normal CD, in that it can only be played in a computer that can verify if the user still "owns" the rights to those bits? If so, then the e-CD cannot be played in a standard CD player that I may buy next week. This destroys my point above, which is that a CD bought electronically is basically identical to one bought in a store.
The main advantage of Napster, however, is that it is a custom application that users are trusting to run on their machines. Imagine if Sony said, "Can we put an app on your desktop to make music sales as easy as Napster?" A lot of us would say "No" merely out of virus fears, and most of the rest would quake once they realized that they needed a custom app from every site they wanted to buy music from.
What people should be e-mailing around is not the music itself, but rather links to music, which people can click on in order to listen or buy. And if this option makes solving the technical problems significantly easier, then I say punt peer-to-peer distribution entirely.
I'm sure Napster's solution will address some of these problems, but will it address them all, and will it address them the way most users want?
With the Bertelsmann deal, the world is jumping from the old Napster way of free music for everyone, to an uncharted new world, without a whole lot of public discussion in between. Before the technical issues are tackled, a little more attention needs to be paid to how the whole thing should work.
Adam Barr worked at Microsoft for over ten years before leaving in April of 2000. He is working on a book about his time there. He lives in Redmond, Washington.