The village Voice


Week of March 20 - 26, 2002

Little Johnny and Big-Biz Music Duke It Out Over Peer-to-Peer Software
Rough Trade by Douglas Wolk

ou have to be pretty desperate to attack your industry's most
enthusiastic potential customers, especially in the middle of an economic
downturn. But that's exactly what National Academy of Recording Arts &
Sciences president Michael Greene did with his already infamous speech at
last month's Grammy Awards, transcribed at the official Grammys Web site
as "The Insidious Virus of Illegal Music Downloading." Everyone in the
music business is panicking over the peer-to-peer file-trading software
that's been springing up. Napster was containable, but its successors
aren't.

The last few weeks have seen even more shake-ups. The baby Naps KaZaA and
Morpheus are at each other's throats, the Napster case's judge called the
major labels' ownership of music copyrights into question, and musicians
have been complaining that the big labels' official alternatives to
peer-to-peer systems are unfair. Greene took the industry's frustrations
out on fans, raging against "musical dreams haplessly snared in this
World Wide Web of theft and indifference." Metallica and Dr. Dre's lawyer
Peter Paterno put it less floridly in The New York Times: "If I were in
charge, I would put viruses everywhere on these services. That would stop
Little Johnny from stealing this stuff."

Jeff Harris is one of those "Little Johnnys." A 20-year-old sophomore at
Columbia, he currently has 1300 MP3s on his week-old computer, and he's
been downloading them since 1996 (at one point, he had around 3000). He
buys CDs less than once a month these days, he says, although he's
purchased a bunch based on files he downloaded-the Strokes, Blur, Heart,
Bauhaus-and many of his MP3s are copied from CDs he owns, which makes
them legitimate. Jeff has heard of people downloading entire albums and
burning them onto CD-Rs, but he's never done it himself.

"I try not to think of the moral implications," he says. "But I'm not
sure if the RIAA [Recording Industry Association of America] understands
what the music industry should really be about. I think the free
downloading of music will take the focus off the recorded format, and put
it back on live music." A friend of his down the hall runs an FTP server
with hundreds of Dave Matthews Band concerts (the group allows fans to
record and trade its live shows for free). Harris is especially annoyed
by the new wave of copy-protected CDs that don't play in computers: "I
like to own the actual physical object, and also to be able to take [the
music] with me or play it on any system."

The official music-downloading services that two major-label coalitions
have launched, pressplay and MusicNet, don't give Harris what he's
looking for. They offer streaming and downloadable files for a monthly
fee, though not in the standard MP3 format; pressplay also offers very
limited CD-burning capabilities for an extra fee. "Oh, Lord," Harris says
with a laugh. "Well, it's nice to know that they're not doing it
correctly, and therefore it'll fail."

MP3 trading is a pretty simple concept. Music files take up a lot of room
on CDs, but they can be converted, or "ripped," into the much smaller MP3
format. If you want to share your MP3s with friends or strangers, you put
them into a "shared folder" on your hard drive. Peer-to-peer programs let
you see what other Internet users have in those folders; if you find
something you want, you can download it directly from your fellow user's
drive.

A year ago, "peer-to-peer" was more or less a synonym for Napster: Shawn
Fanning's small, brutally efficient program spawned a gigantic legal
brouhaha over the widespread copyright infringement it fostered. The
music-business lawsuit that shut down Napster's original service last
year left a void that dozens of other companies rushed to fill-including
the five major record labels themselves.

Obviously, a huge demand for downloading applications existed, and a
centralized index of unlicensed files like Napster's wouldn't fly
legally. But as California's appeals-court ruling on A&M Records v.
Napster last February noted, "To enjoin simply because a computer network
allows for infringing use would . . . potentially restrict activity
unrelated to infringing use." In other words, the network itself was
legal. On the same principle, VCRs are kosher even though they can record
and duplicate copyrighted TV programming.

While the legal issues are sorted out, all the players are watching their
language carefully. If you're pro-trading, upstart companies like KaZaA
and WinMX provide "programs," which are innocent; if you're anti-trading,
they're "services," which are malign. Most of the current generation of
file-trading systems are built on "distributed networks," in which each
computer looks for others running the same program and compares shared
files, without relying on a central index. Theoretically, these networks
can't be shut down, since there's no way to turn them off-and, often, no
central site to sue. Some of them don't seem to be quite as distributed
as they let on, though: When the Fast Track network upgraded its
operating software a few weeks ago, it shut out the popular Morpheus
system, whose owners hadn't paid their licensing bills. (Morpheus has
subsequently switched over to Gnutella, an "open source" network whose
software's code is free for all to use.)

The peer-to-peer companies tend to be disingenuous about what they're
offering. Their disclaimers bring to mind the "novelty tobacco pipe"
labels on bongs: Users have to agree not to infringe copyrights, so if
something illegal happens, it's not the company's problem. Still, it's
pretty indisputable that the essence of their business-typing in a song
title, finding it on somebody else's computer, and downloading it without
paying-is here to stay. Labels can complain about it; they can sue the
companies that profit from peer-to-peer programs or services; they can
demand that hardware be larded with copy-protection schemes, as in the
Security Systems Standards and Certification Act that Senator Fritz
Hollings has been drafting. But they can't stop it. If you can hear a
song, you can copy it. Connect a cable from your stereo to your computer,
run a sound-capture program, and you've got a perfectly good MP3. The
technology is out in the world, and it's not going away.

Record labels can frame this situation in a couple of ways. One
interpretation is to consider unauthorized file trading as straight-up
theft; the other is to treat it as a cheap and easy promotional tool-and
the gateway to a new market.

Smaller labels are generally gravitating toward the latter
interpretation, and figuring out ways to capitalize on it. Ben Lebovitz
of the small New York label Ace Fu-which promotes its bands, including
Pinback and Ex Models, through Napster-is bitter about the major labels'
attitude toward file trading. "They think pressplay and MusicNet are
going to compete with KaZaA and WinMX? It's insane to think they're going
to make any money off of it," he says. "The majors had one chance, and
they could've made money off Napster if they hadn't killed it, but they
didn't have the foresight to see that. The RIAA took away a very
effective means of promoting my label-it does us way more good than harm
to get our music out there to people who wouldn't have heard it."

New York's sovereign independent label Matador, meanwhile, offers songs
from its catalog through a handful of licensed download services,
including pressplay and emusic, a site that offers unlimited MP3
downloads from 900 indie labels for a flat monthly fee. Matador general
manager Patrick Amory says, "Once it became apparent that [our titles
were] going to be available free anyway, the philosophy was (1) Why not
get some money out of it and (2) Get some promotion out of it."

Larger labels, though, are freaking out: They're faced with a significant
new technology that's all but completely out of their control, and
feeling an economic crunch from all directions. Overall record sales
declined last year for the first time in two decades. (Of course,
everyone had a bad year in 2001, and a close look at the figures reveals
something curious: 2001's sales dropped by 22.3 million discs, or about 3
percent, but 2001's top 10 albums sold, in aggregate, 20.3 million fewer
copies than 2000's top 10. Hybrid Theory was no No Strings Attached,
Shaggy was no Eminem, and there's your difference right there.) The
neo-payola "independent promotion" scam-in which labels pay radio
stations' exclusive agents every time a song is added to their
playlists-has gotten so exhausting and expensive that the RIAA has asked
the FCC to investigate the business and make stricter rules. And
high-profile artists' lawsuits (Dixie Chicks, Courtney Love), flameouts
(Mariah Carey), and public gripes about the industry's standard contracts
(led by the Recording Artists Coalition, whose several hundred members
include Bruce Springsteen, Fred Durst, and Beck) have put the majors on
the defensive.

It doesn't help that their own online services are arriving far too late,
and causing problems of their own. MusicNet and pressplay are legitimate
in the sense that the record companies get paid for their use-though the
artists barely do. A recent article in The New York Times suggested that
artists on pressplay get a fraction of a cent per download; according to
the Los Angeles Times, managers of bands including Korn and No Doubt
claim they haven't given their consent to appear on the system at all.
The two major-label services also, as the Napster case's Judge Marilyn
Patel put it, raised "the specter of possible antitrust violations"-they
imply a monopoly on digital distribution, since the majors haven't been
willing to license their catalogs to other companies.

Matt Goyer created Fairtunes.com, a site where file sharers can send
money to their favorite musicians directly; he keeps tabs on the latest
developments in file trading on his weblog, Blog.mattgoyer.com. Goyer
calls the record business's copyright-protection lawsuits "a whack-a-mole
game"-as soon as they get rid of one company, another one springs up.
"The industry is trying to buy time to find a solution," he says. "But if
you go to pressplay or MusicNet, you can't transfer what they're selling
onto your iPod. Consumers don't want that! Consumers want MP3s! Give us
what we want, and we will pay for it." Matador's Amory agrees: "You've
got to use MP3s-you've got to use what people are going to play."

Napster, meanwhile, is developing a new version of its old peer-to-peer
service, which will eventually incorporate both MP3s and a proprietary
format of its own. They're also working on a system that will analyze
sound files' waveforms to make sure they're legit before they can be
downloaded. At the moment, the new Napster is in a semi-public "beta
version," available only to a group of former Napster users, and not to
the press. (Goyer claims it's nowhere near as sleek and efficient as the
original version.) The current scuttlebutt is that this Napster won't
launch for real until it can license the major labels' catalogs, which
won't happen for at least nine months; two weeks ago, Napster laid off
members of its indie-licensing department.

Peer-to-peer music trading may never be as big an issue as its opponents
fear. If you're downloading illicit MP3s on a significant scale, you
probably have (1) a very fast Net connection, (2) not enough money to buy
CDs, and (3) lots of time to wrestle with recalcitrant software,
hardware, and networks. Which means you're probably a college student. At
a certain intersection of disposable income and spare time, it makes much
less sense to go through the hassle of downloading an album's worth of
songs, burning a CD, and printing artwork than it does to buy the damn
thing.

The labels' current PR offensive recalls their "home taping is killing
music" campaign from their last slump, 20 years ago. The movie industry
went through the same sort of anxiety attack when VCRs were introduced;
likewise, in 1942, the head of the American Federation of Musicians
declared that musicians who made phonograph records were "playing for
their own funerals." Each time, the entertainment business changed, but
it didn't collapse.

Even some major industry players are equivocal about file trading now.
Artemis Records' Danny Goldberg, formerly the CEO of Warner Bros.
Records, says, "I think a lot of it is good for the business. If people
are literally trading songs, it's positive: They're turning people on to
music. As long as copyright infractions stay illegal and it's a guerrilla
thing, it's less of a problem than if you can get an IPO and advertise on
the Super Bowl, which is where it was going."

So what will actually emerge from the chaos? One extreme scenario is the
anarchist-utopian ideal, in which "the recording industry, as we know it,
is history" (per the Times Magazine): Copyright is wiped out altogether,
the music industry's middlemen are eliminated, musicians disseminate
their work for free, and the grateful fans pay them directly. That's not
likely to happen. The other extreme is the consumer's nightmare: The
majors install copy protection in every functional piece of hardware and
software, shut out their smaller competitors, and collect royalties from
every playback of every piece of music forever. That's not likely to
happen either, if only because the technology industry is much bigger
than the entertainment industry, and has more lobbying power. Philips,
the electronics company that co-invented CD technology, already plans to
pull the "compact disc" logo from copy-protected discs, and wants to make
labels that manufacture them add warning stickers.

The best bet is that the whole kerfuffle will blow over, the same way the
home-taping issue did years ago. The major labels will offer their own
downloads in a form that the market demands and basically ignore the
peer-to-peer underground. Young people will keep exchanging sound files
with each other, then graduate and get jobs and crave physical artifacts
and pay for most or all of their music.

Some experienced file traders, in fact, are convinced that peer-to-peer's
best days are behind it. Kunal Gupta, for example, was once another
"Little Johnny." A 19-year-old Columbia first-year with just under 3400
MP3s on his hard drive, he's barely downloaded anything in the last three
years. In the days before Napster, he says, MP3 traders relied on a
client-server program called Hotline, whose users would keep special and
rare recordings on their servers to represent the music they cared about
most; you'd get to know and trust their taste over time. Shared folders
in the post-Napster world, though, are "basically a mandatory consequence
of the granted right to leech any media you desire at will," Gupta says;
high-powered search engines turn file sharing into anonymous immediate
gratification. "MP3s really had a golden age," he says, "and I honestly
have nostalgic memories of those long-gone years."

SYSTEMS ANALYSIS

Carly Hennessy photo: Steve Shaw

We compared some baby Naps and the new major-label download services, and
tried looking for the same songs on each of them: Kylie Minogue's
ubiquitous "Can't Get You Out of My Head," Cybotron's 1983 proto-electro
jam "Clear," and the recent bubblegum flop "I'm Gonna Blow Your Mind" by
Carly Hennessy (whose album, Ultimate High, sold fewer than 400 copies
after MCA spent $2.2 million promoting her).

Audiogalaxy (www.audiogalaxy.com)

Easily the champion among current file-trading services, it's got a small
stand-alone application called Satellite that does the actual downloading
work while you search for files using your Web browser. Copyright holders
can ask for their songs to be blocked, for all the good that does: A
search on "kylie can't" yielded 861 variations on the title, and although
"Can't Get You Out of My Head" by Kylie Minogue was unavailable, "Kylie
Minoque" [sic] by Can't Get You Out of My Head did just fine. (Cybotron
got 66 hits, Carly 11.) Still, after The New York Times reported that
users were trading zipped files containing an entire album and its
scanned artwork, searches for "zip" started turning up zilch. A Mac
version of Satellite is available; it's not officially authorized, but
Audiogalaxy founder Michael Merhej says, "We don't discourage its use."

WinMX (www.winmx.com)

The wonk's peer-to-peer service of choice. Its interface is ugly but
informative, with exact file sizes and bitrates, and it makes a point of
being open to all sorts of media, not just music. (Read: porn and
Simpsons episodes.) Tracks from forthcoming hip-hop albums reportedly
tend to show up on WinMX first, for some reason. It mostly searches on
its own network, although it also looks for files through OpenNap (an
open-source variation on Napster). Kylie yielded 478 hits, Cybotron 4,
and Carly 2.

KaZaA (www.kazaa.com)

Formerly part of a trio of portals to the Dutch Napster equivalent
FastTrack-the other two were Grokster and MusicCity's very popular
Morpheus. But Grokster is notoriously loaded with "spyware" that tracks
what you do online, and Morpheus is now off FastTrack and flailing. KaZaA
is specifically targeting former Morpheus users these days; it's a fairly
nondescript stand-alone search engine, and although it offers filters for
"adult or offensive files," copyright-related issues are on the honor
system.

LimeWire (www.limewire.com)

An attractive program for using the Gnutella network. Advantage: It's
open source and fully distributed, so it can't be shut down.
Disadvantage: It's painfully slow-and the more people use it, the slower
it gets. (Morpheus switching over to a Gnutella-based system probably
won't help, either.) What's available through LimeWire fluctuates wildly;
when we checked, it found 85 copies of "Can't Get You Out of My Head" and
none of "Clear" or "I'm Gonna Blow Your Mind," but those results might've
been completely different five minutes later. There's also an even pokier
Mac version.

MusicNet (www.musicnet.com)

Not actually a peer-to-peer service at all, this is the official download
site launched by AOL Time Warner, EMI, Bertelsmann, and Zomba late last
year. Its program, RealOne Player/RealOne Music, is pretty to look at,
but stupendously bloated. For 10 bucks a month, you get to stream 125
songs once, and download another 125-in their proprietary format. Which
means they stop working after a month, and if you want to hear them on
your iPod, you're out of luck. Their music library is seriously limited,
too (none of our test cases were available), although they've got all the
Britney you'd ever want.

pressplay (www.pressplay.com)

The other official major-label service: a collaboration between Sony and
Universal, also featuring licensed tracks from EMI and a handful of
indies. Users can have access to each other's playlists. Ten dollars a
month gets you 300 streams and 30 downloads (in Windows Media files, so
you can't transfer them); for more money, you can also burn a few files
to CDs. No Kylie, although the search engine suggested both her former
boyfriend's band INXS and Paula Abdul as alternatives; no Cybotron, but a
bizarre suggestion of Herbie Hancock; and it drew a blank on poor Carly
Hennessy. -D.W.


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