After Napster: The Revolution that Wasn’t

September 23, 2019 by

It’s been about 20 years since Shawn & Sean – Fanning & Parker – casually unleashed Napster and pretty much defined the tech term “disruptor.” Shawn Fanning’s peer-to-peer file-sharing software platform was like a tsunami slamming into the sleepy tropical beach that was the music industry in 1999. But now what seemed like an unstoppable technological and cultural revolution has been largely squashed and the young people who participated have been put in time-out.

Napster scared the living shit out of the record labels and the Recording Industry Association of America (RIAA) that protects and feeds off the music industry. The labels were quietly ignoring the advance of technology and plying their artificial-scarcity model of filtering artists through A&R, manufacturing stars and restricting access to content. With Napster, for a hot second, average music fans could share MP3 computer files of seemingly the entirety of recorded music – for free.

When the suits got caught with their pants down, they sued the pants off of everybody they could think of. They sued Napster out of business, calling them pirates, thieves and terrorists. They even sued their own customers, infamously targeting college students, single mothers and even the elderly. They sued some 18,000 average Americans with average settlements of $4,000.

But according to Thomas Middelhoff, CEO of Bertelsmann who did an $80 million deal with Napster in an attempt to morph it into a legitimate subscription service, the press was misleading. “It was not about piracy and consumers stealing intellectual property. It was all about control, power and protection of the existing business model.” The means of distribution, which the labels used to maintain artificially high prices for their product, had fallen into the hands of the people. The music industry didn’t understand the technology and didn’t want to. They just wanted it to go away.

Ultimately cornered, labels jumped into the arms of another self-styled tech rebel, Steve Jobs. They felt safer dealing with one distributor (who was also the retailer). The music industry handed Apple a virtual monopoly and gave Jobs generous deals to sell their product under license. Jobs essentially hijacked the platform, with early versions of iTunes looking and functioning much like the Napster client. Rights holders had no intention of “negotiating with terrorists;” they framed Napster’s sole intent as piracy. Jobs turned out to be more a savvy capitalist than a tech upstart. Apple subsequently became the only “legitimate” player in the new digital music landscape.

It seemed like record labels were going down. It was said that the music industry had gone too far; fans would never forgive them for their punitive response to Napster. That now sounds laughable. Music consumers have embraced digital streaming, a far more restrictive system that requires a monthly service fee. Streaming creates recurring revenue streams so lucrative that even Goldman Sachs is hyping it, trumpeting a “massive revival” in their 2019 report on the industry entitled “Music in the Air.” The report states that “Streaming is set to propel global music revenue to record highs.” We didn’t abandon the labels; the music dope is too strong. We’ve been bought off once again with even more intoxicating convenience, and we’re willing to put our privacy and autonomy at risk to get it. And our dirty secret is we don’t really care how much artists get paid.

Ironically, despite the hand-wringing of the likes of Metallica and Dr. Dre, artists are now arguably more screwed than before Napster. Streaming is a completely new business model and rights holders are doing everything they can to keep bigger chunks of the new revenue streams. According to a recent report at the web site digitalmusicnews.com, Apple Music is in the middle of the streaming-service pack, paying artists $0.00783 per stream. At that rate, an artist needs around 200,272 plays to earn the US monthly minimum wage amount of $1,472. YouTube is by far the worst at $0.00069, or 2,133,333 plays to earn minimum wage. For the record, Napster (the rebranded Rhapsody service) is the best payer at $0.01682 per play, or 77,474 plays to earn minimum wage.

As for the vaunted Napster “revolutionaries,” they did set in motion a movement of culture and community in cyberspace. Sean Parker’s vision of the Internet is largely what we now have with today’s social media. To his credit, Parker has profited richly post-Napster. So, maybe it was less a revolution and more a serendipitous moment in the relentless arc of technology, in which a visionary figure in Sean Fanning saw something that wasn’t there and willed it into existence. Or maybe, as writer and Internet activist John Perry Barlow suggests, the revolution simply ran into the inevitable equal and opposite reaction. Or possibly it was just a bunch of privileged kids trying to get stuff for free and sticking it to the man by accident.

In retrospect, the labels seem like the real villains. According to Barlow, “It takes a really crummy ancestor to want to maintain his current business model at the expense of his descendants’ ability to understand the world around them.” Instead of looking for ways that Fanning’s tech could benefit society writ large, the capitalists looked to destroy it. When that didn’t work, they exerted their considerable power and position to restrict and control it, and are rebuilding their coffers in the process.

Yay capitalism.

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