MP3 free-for-all

Being in the RIAA's bad graces puts Napster in good company: An RIAA lawsuit has become almost a coming-of-age ritual for online music companies attempting some new form of digital music distribution. The RIAA has in the past sued up-and-coming companies like Diamond Multimedia, which built the first commercial portable MP3 player; it also sent threatening letters to MP3 search engines like Mp3.lycos.com. In all cases, the RIAA has had to settle.

In late January the RIAA filed a fresh lawsuit, against MP3.com for its new My.MP3.com service.

My.Mp3.com launched in a beta version just a few weeks ago, as an extension to MP3.com's digital music download service. Featuring a nifty little software application called Beam-It, My.MP3.com lets you access CDs you already own as digital files online. (You put your CD in your computer's CD-ROM drive and the Beam-It software recognizes that you own the CD and transfers its own corresponding MP3 files into your online account for your use. Your actual CD acts sort of like a license.) The idea is that My.MP3.com will become your music locker -- a central location to keep all those memory-hogging MP3s, so that you can access them from any computer in the world.

The RIAA's lawsuit here hinges around the invisible machinations behind Beam-It: Whenever you "beam" a CD into your account, someone at MP3.com is actually running out and buying that CD and ripping it for you. MP3.com has amassed and ripped a collection of 45,000 CDs to have at the ready.

The problem, says the RIAA, is that MP3.com has no license to that music, and no right to build that database. As RIAA president Hillary Rosen put it in an open letter to Robertson, "It is not legal to compile a vast database of our member's sound recordings with no permission and no license. And whatever the individual's right to use their own music, you cannot exploit that for your company's commercial gain."

Michael Robertson, in response, says that the new music distribution system is perfectly legal: No one is getting access to those digital music files unless they have already paid for the CD. He has also, as is typical with Robertson, twisted the lawsuit into a grass-roots fight -- it's not one company vs. the RIAA, it's you and your right to listen to your music wherever you want to vs. the Big Bad Record Industry.

"We think it's a clear issue of consumers' rights here," Robertson explains excitedly. "You don't have to pay more royalties to listen to a CD in your living room; why should you pay more royalties to listen to your CD in your living room on your computer?"

And, to an extent, he is right. If I own a CD that I already shelled out $16 for at my local Virgin Megastore, why shouldn't I be able to instantly store that CD online? MP3.com is merely turning that process -- of ripping a CD into individual MP3 files and then uploading those files into an online account -- from an hour-long process into a two-minute process. The end result is the same.

The RIAA, again, is not buying this argument -- or, perhaps it's looking for a way to wrest control away from these upstart companies that threaten to change the way music is exchanged. "This is a new architecture that the record industry doesn't control; and any business model or delivery model that they don't control is a threat to their business," explains Gross of the EFF. "If you can use copyright law as a reason to squash your competition, then why not?"

Although the Napster and MP3.com cases are built around different legal questions, the lawsuits are rooted in the same record industry insecurities. Both lawsuits, when it comes down to it, are arguments about distribution -- My.Mp3.com and Napster both enable unique new ways to exchange and build libraries of digital files; they are means of distribution that didn't originate in the record industry. Both companies are rooted in grass-roots ideologies that want to give control to consumers, not the record companies.

"It's about power," Robertson says, drawing parallels between his company, valued at well over $1 billion, and little Napster, which is looking to follow in MP3.com's footsteps. "It's about who's going to have control. Distribution is one part of it, but there's a macro issue -- who's going to interface with the consumers and deliver the goods to them?"

"People are naturally passionate about music, naturally want to share it; artists naturally want to create and share their music and find their fans: That's what music is all about," enthuses Napster's CEO, Richardson. "Now we have the Internet -- why can't we do some of that there? But everyone in the music industry is coming in and saying, 'No, these are the rules, and I own the music.' They're just pretending to be about copyright," she says.

Richardson is confident that Napster will win its lawsuit; the case will probably be drawn out for much of this year. But even if Napster does win, the company will have to adapt and change. Unless Napster wants to remain a recording industry pariah, it will have to find a way to ease the record labels' fear that kids will stop buying CDs because they can get the same music free as MP3s on Napster.

Richardson is fully aware of this. "Our vision is that we are a marketing mechanism, a way for people to learn about music that they otherwise wouldn't be able to," says Richardson. "We have a long way to go until we figure out the answer to that question [of security]: Whether it's watermarking music, or just being able to hear part of a song, or whether the labels will finally say, 'OK, this is just marketing,' and understand that their market is going to grow $40 billion to $100 billion. We don't have the answers; we're just trying to stay in business."

There is a chance the RIAA will win its suit, of course. But even if Napster is shut down by the RIAA before it even has a proper launch, the concept isn't going to disappear. Kids like Fanning, who are more concerned about building cool music communities than corporate battles, aren't going to let this idea die. As Robertson puts it, "This is all inevitable -- it's universal around Net people that this technology is unstoppable. Even if you were to win against Napster or Mp3.com, the future is still coming and changing."

The real question is whether the record industry will itself try to adapt -- and, instead of trying to derail the train, will jump on and take a ride.

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