British Music Boss: We Should Have Embraced Napster

Jun 28th, 2009
www.arstechnica.com
By: Nate Anderson



 
The head of UK music trade group BPI says that the major labels made a mistake by not doing a deal with Napster a decade ago. Such a deal was never going to happen, but what kind of world might we be living in now if it had?

Geoff Taylor, head of UK major label trade group BPI, wrote an op-ed piece for the BBC today in which he called Napster the 'Rosetta Stone of digital music,' said it was 'simple to understand and use,' and said that the music industry should have 'embraced Napster rather than fighting it.'

While this might sound radical, it's not actually a controversial position among major label executives anymore—a top RIAA executive said the same things to me last week at the Jammie Thomas-Rasset trial in Minnesota.

More interesting is the rationale for why such a deal never got done. If Napster was truly the 'Rosetta Stone' that unlocked the mysteries of digital online distribution, why was it sued out of existence?

According to Taylor, the world of 1999 wasn't ready for such a deal. 'To make music fully and legally available on the internet meant clearing the rights in millions of tracks for a huge number of countries,' he said, 'agreeing how the revenue should be shared, implementing workable DRM (which everyone considered fundamental at the time), developing technology to track all the downloads for royalty purposes, as well as creating a quality user experience people would pay for.'

Napster famously didn't bother about those things, and when it finally did get around to talking to the labels about actually compensating them and their artists for all that music being traded, the industry was insulted by the amounts offered.

Napster wasn't 'prepared to pay fair royalties or to partner in a business model that could sustain investment in new music,' said Taylor. That's too bad, since otherwise everything would have worked out great and we would now be living in a blanket-licensed digital music paradise.

Or would we?

Revisionist history

The record industry's Napster epiphany certainly came late. Steve Knopper, who wrote about the industry's tortured shift to online distribution in the recent book Appetite for Self-Destruction (read our review ), notes the resistance of the labels to services like Napster back in 1999-2000.

Liquid Audio, for instance, was trying to launch a DRM-protected music service years before iTunes. As Liquid Audio exec Gerry Kearby tells the story, 'One day in a moment of pure honesty, [a Sony rep] said, 'Look, Kearby, my job is to keep you down. We don't ever want you to succeed.' Some of them were more interested in experimenting than others, there's no doubt about it. But they were, in effect, buggy-whip manufacturers, trying to keep the auto at bay as long as they could.'

Napster, with its uncontrolled P2P distribution and no DRM, was even more unlikely to reach a deal with the labels, regardless of the money on the table.

And far from using Napster as a 'Rosetta Stone' that helped them understand the online market, major labels instead launched terrible music services like PressPlay to control the distribution of DRMed music themselves.

At this point, it's all ancient history. The interesting question is, ten years after Napster, why has no similar, legal service been offered if the music biz recognizes its Napster mistake? Only in the last year are we starting to see services like Qtrax and Nokia's Comes With Music and the new UK program that offers Universal's music to ISP customers .

None of these are truly like Napster, and the fact that a Napster-style service has still not been legally licensed suggests that it certainly wouldn't have been licensed 10 years ago, either, back when labels were screaming for DRM and higher up-front payments from music startups.

Taylor is right to note that music has loosened its grip, has dropped most DRM, and is willing to license to all sorts of innovative services. Music has gotten over its fear of the online world. Had that been true a decade ago (and had Napster truly been willing to do a workable deal), where might we be today?