February 20, 2001

5:27 PM

Is it just me, or does it seem ridiculous that Napster will have one billion dollars of expendable net income over the next five years that it will be able to pay to the record labels? The labels would be crazy to accept this; in a year, when Napster files for Chapter 11, the settlement would vanish.
posted by delfuego (26 comments total)

But its not like Napster has much to settle with right now.Its better for the record companies to settle now and gamble on whether or not they'll get anything in the future than for them to try and snatch any cash that Shawn and the gang have lying around.After all, Napster might make a little bit of cash in the next few years, and the major labels will have hit the jackpot.
posted by bshort at 5:42 PM on February 20, 2001

Are the record companies run by Dr. Evil? I can't help but say "one billion dollars!" whenever I read that.
posted by mathowie at 6:10 PM on February 20, 2001

Oh goody! Another Slashdot crosspost. Okay, well I'll make a couple Slashdot points:

1) The biggest reason this scheme is Evil incarnate is that, while all the big labels would get a slice of the green stuff, itsy-bitsy labels carrying indie bands would be left out in the cold. Result: free music ends up furthering corporate America. Wouldn't that be just peachy?

2) A huge number of Napster users are minors. Minors do not have debit cards. Mummy and Daddy aren't always going to sit down with little Joey and key in their ATM # so that Joey can keep downloading "free" Eminem tunes. Sorry Napster.
posted by hanseugene at 6:19 PM on February 20, 2001

My eyebrows immediately arched as soon as I spotted that headline too. But as bshort said, it's definitely a better idea then just crushing them now and shaking their pockets for loose change that they don't have. If Napster does switch to a workable pay model, they'll have my money, at least... (Universal Music Group: "Sir, we've just received a check for $1.25..." "Hot damn! Dinner for everyone!")
posted by logovisual at 6:24 PM on February 20, 2001

This scheme doesn't preclude Napster making deals with minor labels in the future, if they sue, so I think calling it evil incarnate is a bit melodramatic.

As for the original question, why wouldn't the record companies do this? If they do, they may get some money in the future, or maybe it'll shut down like they want it to. In the meantime, a functioning Napster will lessen the chances of any similar file-sharing system gaining critical mass. Seems like a win-win to me.
posted by beefula at 6:58 PM on February 20, 2001

hey, just read this on the actual CNN story too: "Under the proposal, $150 million would be paid annually for the first five years to Sony, Warner, BMG, EMI and Universal, with an additional $50 million allotted annually for independent labels.". Lesson: read the story first. I am not just as bad for commenting before reading that as everyone on slashdot, where noone EVER reads the story.
posted by beefula at 8:44 PM on February 20, 2001

D'oh. Shame on me. :\
posted by hanseugene at 8:59 PM on February 20, 2001

People: stop cross-posting /. stories. Everyone here reads BOTH sites.
posted by hanseugene at 8:59 PM on February 20, 2001

Everyone? Really, I didn't know /. was the required companion site to MeFi.

This is what I get for not checking MetaTalk.
posted by Mick at 9:12 PM on February 20, 2001

Nope. I don't read Slashdot.

Only time for one meta-site, and it's MeFi all the way!

Anyway... the big music industry must be laughing their pants off right now. Their surveys that claim that Napster is hurting music sales... could they really have lost $1 billion? Seems sketchy, since there have been many other reports that state the contrary.

Sure, us college kids might be buying less *now*, but I know my *parents* are buying a whole lot more. My mom can barely search for a song on Napster; when she finds one she likes, she goes out and buys the album. She has money! Buying power! I don't!

First millions from mp3.com, now Napster. Looks like they won (ie: made money off the digital music revolution) anyway.
posted by gramcracker at 9:33 PM on February 20, 2001

I don't read Slashdot either, as it loads too damn slow.
posted by kindall at 11:41 PM on February 20, 2001

People: stop cross-posting /. stories. Everyone here reads BOTH sites.

As Zen Master Yogi once said, "No one goes there anymore, it's too crowded."

The things I keep waiting for in this whole saga are, a) Napster announcing they're moving their servers to Hong Kong, seeya and try enforcing copyright there, and b) Someone having the gumption to file a shareholder lawsuit against the majors about how all the legal finagling is just a drain of shareholder resources against a service that promotes CD buying...

But hey, just further evidence that money is overrated as a motivating factor, I suppose...

posted by aurelian at 12:13 AM on February 21, 2001

$1 billion over five years is by my rough estimate something like 1.3% of what the entire record industry would earn in that time. This is purely as an incentive to get the major labels to sign up... if I ran a label I would accept the offer straight away.

However, they're probably figuring that they can get $1 billion in damages alone when the court takes Napster down, so will hang on a while longer.
posted by tobyslater at 4:12 AM on February 21, 2001

$1 billion over five years is by my rough estimate something like 1.3% of what the entire record industry would earn in that time. This is purely as an incentive to get the major labels to sign up... if I ran a label I would accept the offer straight away.

However, they're probably figuring that they can get $1 billion in damages alone when the court takes Napster down, so will hang on a while longer.
posted by tobyslater at 4:12 AM on February 21, 2001

*groan*... CNN.com must specialize in lame graphics.
posted by methylsalicylate at 5:09 AM on February 21, 2001

aurelian, Hong Kong has a very active Intellectual Property Department, and a sophisticated legal system, so it's probably not the best place to have Napster servers.... better to follow the example of the gambling sites, which are mostly based in Central America, by placing the servers in Third World countries.
posted by Chairman_MaoXian at 7:17 AM on February 21, 2001

...mostly based in Central America, by placing the servers in Third World countries

Unless Napster plans on moving not just their servers, but alos their bodies and all their personal assests, forever, to some Third World nation that can't be influenced by the large treasuries of American and European record companies, I doubt moving offshore is a realistic option.
posted by mikewas at 9:01 AM on February 21, 2001

People: stop cross-posting /. stories. Everyone here reads BOTH sites.

I've never read /. in my life.

posted by jennyb at 9:29 AM on February 21, 2001

I can't bear /. or, for that matter, plastic.com. MeFi at least feels like a community as opposed to shrieking in a wind tunnel. Let's let the posts speak for themselves.
posted by Skot at 9:38 AM on February 21, 2001

To those who are anti-napster because of small indie labels (a little off topic, but I'll try to swing it back around):
As I personally remember it, the smaller indie labels grew out of a need for a *distribution* network for lesser/unknown artists... most never made any cash and were eaten up whole by Sony/BMG/Time-Warner.

Napster --in a way, is very much like indie labels in that sense, they are giving artists an oppurtuinty to get their music heard with (in some cases) almost no cost to the artist.

Although, I see Napster having difficulty giving cash to every indie label, I also see that it may take some burden off of the smaller ones by not needing to do as large of a run of CDs (having CDs sit around in storage instead of in stores is making no one any money), being able to concentrate more on promotion & booking live shows, where the heart of any indie or local scene should be.

Or I could be an idiot... who knows?
posted by tj at 9:56 AM on February 21, 2001

You're absolutely right, tj. Indie labels (from what I know of them) and bands generally make little to no money from record sales, getting all their money from live preformances.
posted by sonofsamiam at 10:18 AM on February 21, 2001

The record companies won't accept it. It doesn't cover damages from previous copyright infringment for which Napster would be found guilty under current laws, which amounts to fines of up to $25,000 per incident which is a hell of a lot of incidents with 52 million users and figure an optimistic average of 100 MP3s each. (If you're keeping count, that would be $130 trillion in damages.) And it isn't enough to compensate them (in their view) for what is currently unpoliced piracy and will only become more and more prevalent if it's made legal by this agreement.

What the labels want is no more Napster. Plain and simple. Napster, by making this offer public rather than negotiating behind closed doors, is trying to get the public on their side ("One billion dollars! And they said no? I hate them, the greedy bastards!") for what it's worth, and what it's worth is that some courts have said that copyright extends too far (i.e. it should be about compensation more than control) and that the public has the right to judge what's fair in copyright law because, inevitably, there has to be a balance between artist's rights and the public's right to that art.

Me, I'm going to download Groove and have my friends download Groove and share with them. The closed-space peer-to-peer model, baby!
posted by honkzilla at 11:09 AM on February 21, 2001

Bah. If Shawn Fanning actually knew what he was doing when he designed Napster, we wouldn't be in this mess. Napster is only "peer to peer" in the loosest sense of the word - even IRC is more decentralized. Really, now - if you're going to do something politically sensitive, for christ's sake don't base it on a central server! What was he thinking?

-Mars, furious at lost opportunity
posted by Mars Saxman at 11:55 AM on February 21, 2001

For thems who like the closed p2p model, you can do the same thing with any gnutella client. As long as none of you connect outside your loop, you've got instant file-sharing without the clutter (or the many benefits) that Groove adds on top.
posted by cCranium at 12:33 PM on February 21, 2001

*grin*

"One Billion dollars!"
posted by dangerman at 12:39 PM on February 21, 2001

Mars, doing without a central server imposes non-trivial technological constraints on your P2P service. There exist clients which do without the server, and they're less popular. Why? Short answer: Because there's no server. Long answer: because searches are more complex > take longer > audience smaller > song availability smaller > audience smaller. It's all connected and feeds back into itself.

"One billlll-yun dollars!" with my pinky on my lip.

As for /. "reposts", heck, for something like this I prefer the discussion here. If you see a thread here that you've already read in /. nobody's putting a gun to your head to open it. Also, I only read /. at 3+ in light mode. Wham, bam, thank you ma'am. Try it, it's worth it.
posted by dhartung at 4:51 PM on February 21, 2001