In 1984, in a landmark case, the U.S. Supreme Court refused to block sales of VCRs. Today the purchase of movie videotapes and VCRs by consumers is one of the main sources of revenue for the film industry. The lesson the RIAA could learn from that case is that once the film industry adapted its thinking and accepted that VCRs and blank videotapes would not ruin their industry and could be used for profit the film industry was much better off. Bob Kahn, chairman of the MP3 distributor GoodNoise, says, "Every time a new technology comes along that affects the music industry it changes the industry. There's going to be a shift from revenues derived from CDs to revenues derived from digital downloads and music is going to become much easier to purchase."

The crux of the RIAA v. Napster case is whether the Napster software can be held legally responsible for files that never flow through its own systems. In early May, 2000, U.S. District Judge Marilyn Hall Patel found that Napster is not a mere conduit for information, which rejected Napster's claim that the RIAA v. Napster case should be thrown out because Napster is not directly responsible for copyright infringement on its network. Napster has argued in court papers that it is entitled to some of the same protections from copyright liability as Internet Service Providers (ISPs) are afforded under the DMCA. Obviously the RIAA v. Napster case will play a significant role in determining how much power traditional copyright law retains in the digital age. After receiving Judge Patel's decision the RIAA claimed and early victory by saying, "The decision keeps Napster on the hook for damages that could range into the hundreds of millions of dollars."

Clearly the RIAA is a major force, representing Segram Co. Ltd.'s Universal Music, Bertelsmann AG's BMG, Sony Corp.'s Sony Music and Time Warner Inc.'s Warner Music Group, which is merging with EMI Group Plc's EMI. It would be remarkable, perhaps impossible, for a start-up company like Napster to beat the conglomerate of companies that are represented by the RIAA in a district, state or federal court. Not helping Napster's cause was the ruling by a federal judge in New York that said MP3.com violated copyright law with its database that lets users effectively store music and then access it via any computer connected to the Internet. The biggest difference between the MP3.com and Napster cases is that MP3.com has a database where it stores thousands of MP3s and Napster has no such database. Perhaps Napster is the digital equivalent of the piano player in the brothel: hey, we don't know what goes on up-stairs.

Management companies that represent musicians are just as upset as the musicians themselves over the public's use of Napster, mainly because these management companies fear lesser profits for themselves down the road. Ron Stone, of the Gold Mountain Management Company, says, "It turns out Napster's no better than the record companies. In fact, they're worse, because they're offering nothing and taking everything." Cliff Burnstein, of Q Prime Management, discusses the RIAA v. Napster lawsuit, "There's no question Napster's going to lose in court. The only question is how much money in damages they'll have to pay." Finally Miles Copeland, who manages the musician Sting, considers what could happen if Napster is allowed to continue in its current format, "It's all very well to say music should be free, but the reality is if you don't pay the artists, the road crew, the musicians, the recording studio, if there's no money in music, there's not going to be much music left."
Links:
www.goodnoise.com
www.mp3.com
www.bmg.com