A file-trading ship of fools

Don't scapegoat greedy record execs for Napster's failure, says Joseph Menn in "All the Rave: The Rise and Fall of Shawn Fanning's Napster." The inept bunglers who ran the company have only themselves to blame.

By Farhad Manjoo

Apr 21, 2003 | Joseph Menn's "All the Rave: The Rise and Fall of Shawn Fanning's Napster" begins with an epigraph from "Hamlet." The lines are from Act III, Scene ii, a point in the play where Hamlet suspects, but is not yet sure, that his uncle, Claudius, has killed his father. Hamlet needs a second opinion. "Observe mine uncle," he tells his friend Horatio. "Give him heedful note, for I mine eyes will rivet to his face, and after we will both our judgments join in censure of his seeming." It's an elegant way of saying, more or less, "Keep an eye on the old man and let me know if you, too, think he's a rotten creep."

The music world might be very different today had Shawn Fanning ever been so blunt about his uncle, John. Napster was a brilliant bit of technology, and it inspired a host of compelling legal and economic questions, but the early story of Napster, missed by the hundreds of journalists who covered the company, is a classic tale of intra-familial duplicity.

As Menn tells it, Shawn Fanning, the 19-year-old who created Napster in a fit of Red Bull soda-fueled coding, was a sweet, smart kid who loved music and computers. But it was Shawn's uncle, John Fanning -- a struggling businessman who loved only money, power, and himself -- who took early control of the company, and was responsible for many of its big mistakes. Menn suggests that Shawn never quite appreciated, as Hamlet did, his uncle's chicanery. While everyone else involved in Napster saw through the uncle, Shawn himself seemed always to be in thrall to John Fanning -- and that may have been the company's undoing.

While it has its moments of low farce, "All the Rave" unspools like an Internet-age tragedy, a story of technological inspiration that, very quickly, morphs into a mess from which no good end can come. Menn, a reporter at the Los Angeles Times, has exhaustively researched every aspect of the Napster saga, and the book reads like a definitive account. The attention to detail is nearly overwhelming; Menn tends to get mired in the dull complexities and lesser characters of this tale, often to the detriment of the quick pace of his larger story. Menn also rarely pulls his nose out of the muck of the story long enough to indulge in any broader analysis. He does not ask, for instance, whether Napster changed music, or musicians. He doesn't even wonder why millions of people felt it was OK to steal music.

Instead, Menn delivers an in-depth chronological recounting of Napster's woes, which is still something quite useful for anyone who wants to make sense of the tumultuous days when Hollywood and the Net first collided. Napster was the hottest news story of the infant millennium, a haze of headlines telling of increasingly high-stakes litigation and joyous last-minute reprieves -- headlines to stories we probably never read because we were too busy queuing up songs to download before the service went dark.

Napster was the fastest-growing Internet service in an era where fast was all that counted; at one point, it was expanding by as much as 35 percent every day. But as everyone said at the time, Napster was more than a killer app: it was the beginning of a revolution. Like only the Web browser and instant messaging before it, here was an Internet application that hit you at a primal level, instantly transforming anyone who used it from a passive settler for sub-par radio pop into a music hedonist, someone with the power, suddenly, to choose.

It's not so surprising, then, that few of us much bothered with what was happening inside the Napster corporation during the frenzy. Compared to the revolution the software had sparked, those details would seem, inevitably, a bit beside the point. Who was running the company? Were they qualified to do so? How had they decided to launch a firm on such a shaky legal foundation? And who on earth was funding this idea? Perhaps interesting stuff, but nothing like the question, so prevalent at the time, of whether they -- those curmudgeons at the recording industry -- would ever manage to revoke our full access to the Beatles catalog.

Menn revels in the insider goings-on, however, and he reveals what seems, now, an obvious point. It was mismanagement at Napster, as much as it was the litigiousness of the recording industry, that led to the death of the service. Napster was run by a ship of fools, Menn says, a collection of investors, executives and attorneys who never really determined what they wanted to do with the company. At the head of this crew was John Fanning, who helped his nephew set up the company only on the condition that the uncle get 70 percent of the shares in the firm. There were other questionable characters brought in by Fanning, people who had been "well familiar with angry investors, the courts, and the cops long before Napster's landmark fight with the record industry," Menn writes. Together, this early group sealed Napster's fate. To the extent that there was a business model, it was based on an unreasonably optimistic legal outlook and a strategy of dealing with the recording industry that "comes close to the dictionary definition of extortion -- using threats to extract money."

Who killed Napster? Certainly the record labels were glad to stamp it out. But with executives like the ones running Napster, who needed enemies?

Next Page: A litany of missed chances, stupid decisions and willful ignorance of the law

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